Multiple Step Income Statement:
It is a format in which there are multiple sub-totals for gross margin, operating expenses and other income. This layout allows the readers to gather the types of information they want to have.
Net Sales: It is the amount of sales of a company which comes after reducing sales returns and allowances, sales discount.
Single step Income statement:
Single step income statements is a format that uses a single subtotal for all the expense line items and revenue line items with showing a net gain or loss at the end of the report. This format is usually followed by businesses having single operation.
Cost of Merchandise sold (COGS):
The direct cost incurred in the production of goods. It involves labor cost, material cost, direct factory overheads. The purpose of finding the COGS is to compute the “true cost” of goods sold. It supports the management in monitoring the purchase cost of inventory.
1.
To compute: Net sales for the year.
2.
To compute: Total cost of merchandise purchased for the year.
3.
To prepare: Multi-step income statement.
4.
To prepare: Single-step income statement.
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FINANCIAL ACCT.FUND.(LOOSELEAF)
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