What are the two subtotals that distinguish the multiple-step income statement from the single-step income statement?
A)Income before taxes and income taxes
B)Total operating revenues and total operating expenses
C)Income from operations and income before taxes
D)Total revenues and total expenses

Question

Quizplus · Accepted Answer

The two subtotals that distinguish the multiple-step income statement from the single-step income statement are income from operations and income before taxes. In a multiple-step income statement, the operating section is broken down into several subcategories, such as cost of goods sold, gross profit, and operating expenses. The income from operations is the difference between the gross profit and operating expenses. Income before taxes is calculated by subtracting non-operating expenses from income from operations. The single-step income statement, on the other hand, lists all revenues and expenses in one category, with no subtotals. Therefore, option C is the correct answer.

What Are the Two Subtotals That Distinguish the Multiple-Step Income