Asked by Thanh Ph??c Hu?nh Th? on Jun 30, 2024
Verified
Gross profit does not appear
A) on a multiple-step income statement.
B) on a single-step income statement.
C) to be relevant in analyzing the operation of a merchandiser.
D) on the income statement if the periodic inventory system is used because it cannot be calculated.
Gross Profit
The profit from sales revenue remaining after the cost of goods sold is subtracted, but before accounting for overheads, payroll, taxes, and interest expenses.
- Understand the function and computation of gross profit within the income statement.
Verified Answer
ZK
Zybrea KnightJul 07, 2024
Final Answer :
B
Explanation :
Gross profit is only calculated on a multiple-step income statement, which separates operating revenues and expenses from non-operating gains and losses. On a single-step income statement, all revenues and expenses are simply listed together, making it impossible to calculate gross profit.
Learning Objectives
- Understand the function and computation of gross profit within the income statement.
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