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Chapter 5: Q5-20RQ (page 294)

Describe the single-step income statement.

Short Answer

Expert verified

A single-step income statement contains the operating and non-operating revenues and expenses and reflects thenet income of a business.

Step by step solution

01

Meaning of Income Statement

An income statement is one of the components of financial statements that describes the revenues and expenses during one accounting period. This report is prepared to ascertain the net profits or net losses.

02

Description of single-step income statement

A single-step income statement presents a simplified overview of a business entity'srevenues and expenses. It directly represents the net income of the entity in the bottom line and does not bifurcate theoperating and non-operating activities section.

It considers total revenues and expenses to compute the net income or net loss earned or incurred by the business during oneaccounting period.

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Most popular questions from this chapter

On November 4, 2018, Cain Company sold merchandise inventory on account to Tarin Wholesalers, \(12,000, that cost \)4,800. Terms 3/10, n/30. On November 5, 2018, Tarin Wholesalers paid shipping of $30. Tarin Wholesalers paid the balance to Cain Company on November 13, 2018.

Requirements

1. Journalize Tarin Wholesaler鈥檚 November transactions.

2. Journalize Cain Company鈥檚 November transactions.

What is the Cost of Goods Sold (COGS), and where is it reported?

What account is debited when recording the payment of freight when using the periodic inventory system?

Journalize the following sales transactions for Paul Sportswear. Explanations are not required.

Aug. 1 Paul sold \(66,000 of women鈥檚 sportswear on account, credit terms are 2/10, n/30. Cost of goods is \)33,000. Paul uses the gross method to record sales revenue.

25 Paul receives payment from the customer on the amount due.

Journalize the following sales transactions for Austin Mall. Assume Austin Mall uses the gross method to record sales revenue. Explanations are not required.

Jan. 4 Sold \(10,000 of antiques on account, credit terms are 1/15, n/30. Cost of goods is \)5,000.

20 Austin Mall received payment from the customer on the amount due from Jan. 4.

20 Sold \(5,200 of antiques on account, credit terms are 1/10, n/45, FOB destination. Cost of goods is \)2,600.

20 Austin Mall paid $120 on freight out.

29 Received payment from the customer on the amount due from Jan. 20, less the discount.
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