What is the order of the subtotals that appear on a multi-step income statement? A. Operating Income, Gross Profit, Net Income, Total Other Income and Expenses B. Gross Profit, Operating Income, Total Other Income and Expenses, Net Income C. Gross Profit, Operating Income, Net Income, Total Other Income and Expenses D. Total Other Income and Expenses, Operating Income, Gross Profit, Net Income

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Business

Kolton Mcknight

17 March, 17:00

What is the order of the subtotals that appear on a multi-step income statement? A. Operating Income, Gross Profit, Net Income, Total Other Income and Expenses B. Gross Profit, Operating Income, Total Other Income and Expenses, Net Income C. Gross Profit, Operating Income, Net Income, Total Other Income and Expenses D. Total Other Income and Expenses, Operating Income, Gross Profit, Net Income

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Alexandra · Answer 1

B. Gross Profit, Operating Income, Total Other Income and Expenses, Net Income

Explanation:

In multi step income statement first of all we calculate the gross profit by subtracting cost of goods sold from revenue. After that we deduct all the operating expenses to reach on the operating income. Now total other income and expenses are adjusted in the operating income to make income before interest and tax. At the end we reach on the net income after deducting interest and tax expenses.