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Gaap under a single step format the classification of all expenses is done by functions and then those functions are deducted from the total income in order.
Gaap statement of income. Gaap follows either a single step or multiple step format. In this the classification of all expenses are mentioned under this head. The general accepted accounting principles gaap income statement is a financial report prepared in accordance with guidelines set by the financial accounting standards board fasb. Selling expenses sales salaries and commissions 202 644 sales office salaries 59 200 travel and entertainment 48 940.
Illustration 4 4 sample supporting schedule note d. Then they are deducted from the total income to get net income before tax. Both small and large companies use such a format. Organizations that follow these principles can assure investors of a certain amount of consistency which can make it easier to weigh investment options.
Income statement example gaap generally accepted accounting principle has two classifications.
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