Leaning Online

Here Multi Step Income Statement means that while presenting this Financial Statement, we divide it into different parts so that the Users of Financial Statements can easily understand and find the relevant information in Income statement . We divide the statement into three parts: ü   Gross Profit / Loss ü   Operating Income / Loss ü   Net Income / Loss ü Gross Profit / Loss It is obtained as: Gross Profit / Loss = Net Sales - Cost of Sales Here Cost of Sales = Opening Inventory + Net Purchases - Closing Inventory ü Operating Income / Loss All the Operating Expenses are added up and then deducted from Gross Profit to get Operating Income or Loss for the business. Operating Income / Loss = Gross Profit – Total Operating Expenses ü Net Income / Loss We get Net Income or Loss after adding Other / Non-Operating Income and Gains and deducting Other Expenses / Non-Operating Expenses and Losses...