A multiple-step income statement includes a subtotal for gross profit.

Question

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A multiple-step income statement includes several sections or steps that show different sources of revenue and expenses. One of the key sections is the calculation of gross profit, which is the difference between net sales and the cost of goods sold. This subtotal is important because it shows how much profit the company is making from its core operations, before considering other expenses such as operating expenses and taxes.

A Multiple-Step Income Statement Includes a Subtotal for Gross Profit