What is a single-step income statement and when should it be used?

[accounting byte]

The single step income statement is a simplified financial report which rates total revenues and total expenses to give net income. It differs from a multi step format in that it has no operating and non operating categories as per the expenses. It is this format that is perfect for small business or sole proprietorship businesses interested in a dashboard type overview of profitability with no detailed analysis. Although easier to prepare and understand, it carries less insight into business performance. The multi step format provides more information for more complex financial decisions.

[Author]

Posts