INCOME STATEMENTS FOR A PERPETUAL INVENTORY SYSTEMINCOME STATEMENTS FOR A PERPETUAL INVENTORY SYSTEM

Classified Multiple-Step Income Statement

This format is useful for ____________________ reporting because it is so detailed.

It includes a detailed calculation of Net Sales (Sales minus ___________________________ minus ___________________________).

It also shows the calculation of _____________________ (Net Sales minus COGS).

Operating expenses are broken down into two classifications: ________________________ and _________________________________________.

There is also a section called: _______________________________________________. This section is used to list revenues and expenses that are not part of normal business operations. Revenue amounts are added and expense amounts are subtracted to arrive at a net amount.

Multiple-Step Income Statement

This format is commonly used in _____________________ reports.

There is no detailed calculation of __________________________.

There is a calculation to show Gross Profit (_________________ minus ________________)

The operating expenses are not divided into classifications.

Other revenues and expenses are still listed at the end of the statement.

Single-Step Income Statement

This format is used for _________________ reporting.

Cost of Goods Sold is shown as an ________________________________.

Similar operating expenses are grouped together. Examples: _______________________ and ___________________________________.

Other revenues and expenses are not listed separately.