Determining gross profit is the first step in a multiple-step income statement for a merchandising firm.

Question

Quizplus · Accepted Answer

Gross profit is calculated by subtracting the cost of goods sold from net sales, and it is indeed the first step in preparing a multiple-step income statement for a merchandising firm. This step is crucial for determining the profitability of the company's core business activities before accounting for other operating expenses and revenues.

Determining Gross Profit Is the First Step in a Multiple-Step