Single-Step Income Statement

What single-step income statement covers

A single-step income statement totals all revenues, totals all expenses, and reports the difference as profit in one step. It gives no gross profit or operating profit subtotal, which makes it simpler to prepare but far less informative than a multi-step presentation.

Challenges here ask for a correctly grouped single-step statement and highlight what the format does not show.

Where marks are usually lost

• Introducing subtotals, which turns it into a multi-step statement.
• Placing an item in revenues that belongs in expenses, or the reverse.
• Omitting tax from the expense total.