College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Textbook Question
Chapter 15, Problem 1TF
LO1 A multiple-step form of income statement calculates gross profit, before subtracting operating expenses.
Expert Solution & Answer
To determine
Identify whether the given statement is true or false.
Answer to Problem 1TF
The given statement “A multiple-step form of income statement calculates gross profit, before Subtracting operating expenses” is true.
Explanation of Solution
Multi-step income statement:
Multi-step income statement provides step-by-step computation of net sales, cost of goods sold, operating expenses, gross profit, other revenues and expenses, income from operations and net income.
- In a multi-step income statement, Initially Gross sales are computed (less sales returns and allowances and sales discounts) and this difference is known as net sales.
- Cost of goods sold is subtracted from net sales to get gross profit or gross margin. Then, operating expenses are subtracted from the gross profit to calculate income from operations.
Therefore, from the above explanation, the given statement “A multiple-step form of income statement calculates gross profit, before Subtracting operating expenses” is true.
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Students have asked these similar questions
39-Which of the following statement is TRUE for a Multi-Step Income Statement?
a.
It divides both revenue and expenses into operating and non-operating expenses
b.
Interest expenses cannot be recorded
c.
Revenue cannot be recorded
d.
It takes only operating expense
1. What are the total Expenses under the single-step income statement?
a. 389,816
b. $85,710
c. 856,589
d. $115,710
2. What is Net income?
a. $ 85,710
b. $505,526
c. $972,299
d. $115,710
3. What is the other expenses?
a. 18,500
b. 10,799
c. 16,198
d. 30,000
15-Which of the following statement is TRUE for a Multi-Step Income Statement?
a.
Revenue cannot be recorded
b.
It divides both revenue and expenses into operating and non-operating expenses
c.
It takes only operating expense
d.
Interest expenses cannot be recorded
Chapter 15 Solutions
College Accounting, Chapters 1-27
Ch. 15 - LO1 A multiple-step form of income statement...Ch. 15 - Prob. 2TFCh. 15 - Prob. 3TFCh. 15 - Prob. 4TFCh. 15 - LO4 Accounts receivable turnover is the number of...Ch. 15 - Prob. 1MCCh. 15 - Prob. 2MCCh. 15 - Prob. 3MCCh. 15 - Prob. 4MCCh. 15 - Prob. 5MC
Ch. 15 - Prob. 1CECh. 15 - Prob. 2CECh. 15 - Prob. 3CECh. 15 - Prob. 4CECh. 15 - Prob. 5CECh. 15 - Prob. 6CECh. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - Describe how to calculate the following ratios (a)...Ch. 15 - Where is the information obtained that is needed...Ch. 15 - Explain the function of each of the four closing...Ch. 15 - What is the purpose of a post-closing trial...Ch. 15 - What is the primary purpose of reversing entries?Ch. 15 - What is the customary date for reversing entries?Ch. 15 - What adjusting entries should be reversed?Ch. 15 - REVENUE SECTION. MULTIPLE-STEP INCOME STATEMENT...Ch. 15 - COST OF GOODS SOLD SECTION, MULTIPLE-STEP INCOME...Ch. 15 - MULTIPLE-STEP INCOME STATEMENT Use the following...Ch. 15 - FINANCIAL RATIOS Based on the financial statements...Ch. 15 - CLOSING ENTRIES Using the spreadsheet and...Ch. 15 - REVERSING ENTRIES From the spreadsheet used in...Ch. 15 - ADJUSTING, CLOSING, AND REVERSING ENTRIES Prepare...Ch. 15 - INCOME STATEMENT, STATEMENT OF OWNERS EQUITY, AND...Ch. 15 - FINANCIAL RATIOS Use the spreadsheet and financial...Ch. 15 - END-OF-PERIOD SPREADSHEET, ADJUSTING, CLOSING, AND...Ch. 15 - REVENUE SECTION, MULTIPLE-STEP INCOME STATEMENT...Ch. 15 - COST OF GOODS SOLD SECTION, MULTIPLE-STEP INCOME...Ch. 15 - MULTIPLE-STEP INCOME STATEMENT Use the following...Ch. 15 - FINANCIAL RATIOS Based on the financial...Ch. 15 - CLOSING ENTRIES Using the spreadsheet and...Ch. 15 - Prob. 6SEBCh. 15 - Prob. 7SEBCh. 15 - INCOME STATEMENT, STATEMENT OF OWNERS EQUITY, AND...Ch. 15 - FINANCIAL RATIOS Use the work sheet and financial...Ch. 15 - END-OF-PERIOD SPREADSHEET, ADJUSTING, CLOSING, AND...Ch. 15 - Prob. 1MYWCh. 15 - Dominique Fouque owns and operates Dominiques Doll...Ch. 15 - Prob. 1CPCh. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Prob. 2.1COPCh. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Prob. 2.4COPCh. 15 - Prob. 2.5COPCh. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Comprehensive Problem 2: Accounting Cycle with...Ch. 15 - Prob. 2.8COP
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- A simple income statement ________. A. combines all revenues into one category B. does not combine all expenses into one category C. separates cost of goods sold from operating expenses D. separates revenues into several categoriesarrow_forwardWhich of the following is a measurement of earnings that represents the profit before interest, taxes, depreciation and amortization are subtracted? A. net income B. retained earnings C. EBITDA D. EPSarrow_forwardWhat is the term used for the profit on a sale before any operating expenses have been deducted? a. Net Income b. Net Profit c. Gross Profit d. Gain on Sale e. All of the abovearrow_forward
- Multiple-step income statement Identify the enurs in the following income statement and prepare a corrected income statement:arrow_forwardA multi-step income statement ________. A. separates cost of goods sold from operating expenses B. considers interest revenue an operating activity C. is another name for a simple income statement D. combines cost of goods sold and operating expensesarrow_forwardIndicate what impact ( for increase; for decrease) the following transactions would have on the accounting equation, . Table 3.22arrow_forward
- Income Statement 1) Why are items such as sales and labour/Gross Profit on the CR side and items like Operating Expenses on the DR side? 2) What are examples of Interest Expense and Depreciation Expense?arrow_forwardQ1. On a multiple-step income statement, the excess of sales over the cost of goods sold is called: A. Operating income B. Income from Operations C. Gross Profit D. Net Incomearrow_forwardIn a multiple-step income statement, the dollar amount for income from operations is always the same as net income. Please explain with full explanation a. True b. Falsearrow_forward
- 4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.arrow_forwardRequirement : 2 Calculate the following from the additional information given G Gross profit H Net profitarrow_forward11) ___________________________ in which the similar expenses are grouped together and intermediate figures such as gross profit, operating income, EBIT, etc. are calculated. a. Multi step income statement b. Income statement c. Single step income statement d. Nonearrow_forward
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