What Does A Multiple Step Income Statement Look Like

Unlike the single step income statement format where all revenues are combined in one main income listing and all expenses are totaled together the multiple step statement lists these.

What does a multiple step income statement look like. Sales and cost of goods sold are displayed at the top of the statement with gross profit listed as a sub total. Generally net income will be the same no matter which type of income statement is used. A single step income statement is a short and sweet look at your revenue expenses and net income. A major feature of the financial statement is a detailed listing of expenses.

The multi step income statement lists revenue cogs operating expenses operating income and non operating expenses. Single step and multiple step are two ways that companies complying with gaap accounting standards can report income statements. Multiple step statements provide an in depth look at a company s. A multiple step income statement separates out revenue costs gains and losses to help a company to better understand.

After discussing single step income statement now we will look in to another income statement format called multi step income statement. The first line the top line is the revenue. An alternative to the single step income statement is the multiple step income statement because it uses multiple subtractions in computing the net income shown on the bottom line. The purpose of an income statement is to calculate net income of a company.

Multi step income statement is the income statement of the company which segregates the total operating revenue of the company from non operating revenue and total operating expenses of the company from non operating expenses thereby separating the total revenue and expense of a particular period into two different sub categories i e operating and the non operating. But the multi step breaks things down into much more detail. In financial statement preparation there are two types of income statements. It is a financial report which contains business operations related to sales cost of goods sold both operating and non operating expenses net income.

The multi step income statement is actually the more common of the two than the single step so it is a good idea to learn how to use it and how it looks. A simple multiple step income statement separates income expenses gains and losses into two meaningful sub categories called operating and non operating.