Question
A single-step income statement differs from a multi-step income statement in that it:
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
IAS 1 — Presentation of Financial Statements
A single-step statement groups all revenues together and all expenses together, arriving at profit in one subtraction with no gross profit or operating profit subtotal. The classification work is therefore only revenue versus expense.
Common mistakes
- Introducing a gross profit subtotal, which makes the statement multi-step.
- Placing a gain among expenses because it arose on a disposal.
- Omitting income tax expense from the expense grouping.
Further readingIncome statement vs balance sheet