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26 February, 03:44

The amount of net income shown on a multi-step income statement will differ from the amount of net income shown on a single-step income statement. (A) True (B) False

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  1. 26 February, 04:29
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    (B) False

    Explanation:

    As we know that

    Net income = Total revenues - total expenses

    The main difference between the single - step income statement and the multi-step income statement due to classifications

    In the single - step income statement, we normally

    Revenues

    Total revenues (A)

    Expenses

    Total expenses (B)

    Net income (A-B)

    while in multi-step income statement,

    Sales revenue

    Less: Cost of goods sold

    Gross profit

    Less: Operating expenses

    General and administrative expenses

    Depreciation expense -

    Profit before tax

    Less: income tax

    Net income

    So in both the cases, the amount of the net income is equal.
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