Single-Step

Examples of Single-Step in the following topics:

• Income Statement Formats

  • Income statements are commonly prepared in two formats: multiple-step and single-step.
  • Income statements are commonly prepared in two formats: multiple-step and single-step.
  • In the multiple-step format revenues are often presented in great detail, cost of goods sold is subtracted to show gross profit, operating expenses are separated from other expenses, and operating income is separated from other income.
  • In the single-step format, all expenses are combined in a single section including cost of goods sold.

• Introduction to the Income Statement

  • This contrasts with the balance sheet, which represents a single moment in time.
  • There are two types of income statement, a single-step income statement and a multi-step income statement.
  • The single-step income statement takes a simpler approach, totaling revenues and subtracting expenses to find the bottom line.
  • The multi-step income statement is more complex.
  • It takes several steps to find the bottom line, starting with the gross profit.

• Special Reporting

  • Special, or irregular, items appear on single step or multi-step income statements, and require special reporting procedures.

• Differences Between GAAP and IFRS and Implications of Potential Convergence

  • The convergence of accounting standards refers to the goal of establishing a single set of accounting standards that will be used internationally, and in particular the effort to reduce the differences between the US Generally Accepted Accounting Principles (US GAAP), and the International Financial Reporting Standards (IFRS).
  • The goal of and various proposed steps to achieve convergence of accounting standards has been criticized by various individuals and organizations.
  • In the United States, the Securities and Exchange Commission (SEC) has been taking steps to set a date to allow U.S. public companies to use IFRS,and perhaps make its adoption mandatory.

• Closing the Cycle

• Impairment Measurement

  • Summarize the steps a company takes to measure an assets impairment

• Categories of Goods Included in Inventory

  • A queue leading to a production step shows that the step is well buffered for shortage in supplies from preceding steps, but may also indicate insufficient capacity to process the output from these preceding steps.

• What Is the Accounting Cycle?

  • As we walk through the steps of the accounting cycle, consider the following example.
  • The accounting cycle is a series of steps performed during the accounting period (some throughout the period and some at the end) to analyze, record, classify, summarize, and report useful financial information for the purpose of preparing financial statements.
  • There are eight steps in the accounting cycle and they are as follows:
  • As we walk through the steps of the accounting cycle, consider the following example.

• Classifying Liabilities

  • Current liabilities are often loosely defined as liabilities that must be paid within a single calender year.
  • Some of these normal operating costs include salaries payable, wages payable, interest payable, income tax payable, and the current balance of a long-term debt that will be due within a single year.
  • Long-term liabilities are reasonably expected not to be liquidated or paid off within the span of a single year.

• Debt-to-Equity Ratio

  • When used to calculate a company's financial leverage , the debt-to-equity ratio includes only long-term liabilities in the numerator and can even go a step further to exclude the current portion of the long-term liabilities.