Question

What is an advantage to using a multi-step income statement?

Answer 1

Answer:

The multi-step income statement offers several advantages to users. These include the higher level of detail and the multiple levels of income reported. The higher level of detail included on the multi-step income statement comes from separating the company's expenses into several different categories, including the cost of goods sold, operating expenses and non-operating expenses. Each level of income comes from subtracting each category of expense. Income levels include gross profit, operating income and net income.

Explanation:

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Answer 2

Answer:

major benefit of a multi-step income statement is the demonstration of gross profit.This allows you to see how much the company is earning on sales before operating income is considered. Seeing detailed gross profit also allows you to calculate gross margin, which is gross profit divided by sales.