A Primary Advantage of the Multiple-Step Format of the Income

question 130

Multiple Choice

A primary advantage of the multiple-step format of the income statement over the single-step format is that the multiple-step format:

• A) classifies expenses by function.
• B) results in a higher amount of net income.
• C) separately lists income tax expense.
• D) lists revenues and expenses in order of their dollar amount.

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Definitions:

Total Assets

The sum of all resources owned by a company that can be converted into cash or used in the operation of the business to generate revenue.

Shareholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities.

General Ledger

A comprehensive record of a company's financial transactions over the life of the organization.