An advantage of the single-step income statement over the multistep form is
A)the amount of information it provides.
B)its simplicity.
C)its comprehensiveness.
D)its use in computing ratios.

Question

Quizplus · Accepted Answer

The single-step income statement is simpler than the multi-step income statement as it only displays the total revenues and total expenses, while the multi-step income statement breaks down the different components of revenues and expenses. While the multi-step income statement may provide more information and be more comprehensive, the single-step income statement is easier to understand for those without an accounting background. Additionally, both forms can be used to compute ratios, so D is not the correct answer.

An Advantage of the Single-Step Income Statement Over the Multistep