Multiple-step income statements:
A)Are required by the FASB.
B)Contain more detail than a simple listing of revenues and expenses.
C)Are required for the perpetual inventory system.
D)List cost of goods sold as an operating expense.
E)Can only be used in perpetual inventory systems.

Question

Quizplus · Accepted Answer

Multiple-step income statements contain more detail than a simple listing of revenues and expenses, and are commonly used to provide investors and creditors with a clearer picture of a company's net income and operating performance. They are not required by the FASB, nor are they limited to use in perpetual inventory systems. Cost of goods sold is typically listed separately from operating expenses in a multiple-step income statement.

Multiple-Step Income Statements