Lesson 2 of 21
An income statement can be presented in a single-step format or multi-step format.
In single-step format, all revenues are grouped together and all expenses are grouped together.
The following is an example of single-step format.
In multi-step format, there are multiple groups for expenses, such as cost of goods sold, operating expenses, and other expenses. Several subtotals are computed before the net income is calculated. We will see gross profits as well as net profits in the multi-step format. The income statement presented earlier for Innovative Products Inc. was in multi-step format. The following is another example of multi-step format income statement.
