In a multi-step Income Statement:

A. Total expenses are subtracted from total revenues.

B. Gross profit (margin) is shown as a separate item.

C. Cost of sales and operating expense are subtracted from total revenues.

D. Other income is added to revenue from sales.

Answer: B.

Explanation: The multi-step income statement is ultimately used in determining Net Income which is calculated by separately determining:

1. Gross profit (Net sales - cost of goods sold)

2. Operating income (Operating expenses - Gross profit)

3. Operating income combined with non - operating revenue, losses, profit and expenses to obtain the net income or loss.

Conclusively, Gross profit (margin) will be calculated separately, which then be used to obtain the operating income.