Which of the following statements is true regarding the multiple-step income statement?
A)The multiple-step income statement is used only by companies that sell products,not those that provide services.
B)The multiple-step income statement is helpful in determining a company's working capital.
C)The multiple-step income statement reports the same net income as the single-step income statement.
D)The multiple-step income statement is required under generally accepted accounting principles.

Question

Quizplus · Accepted Answer

The net income reported in the multiple-step income statement will be the same as the single-step income statement. The purpose of the multiple-step income statement is to provide more detail and breakdown of a company's revenues, expenses, and profits. It is not required by GAAP, but it is commonly used by companies that sell products and services, as it provides a more informative analysis of the profit or loss for the period. It does not provide information about a company's working capital.

Which of the Following Statements Is True Regarding the Multiple-Step