Question

7

What is an advantage to using a multi-step income statement?
The fixed costs and variable costs are broken out separately
Direct expenses and indirect expenses are broken out separately
Net Income is shown before income taxes
All income items are grouped in on section, and all expenses in another

Answer 1

Answer: A major benefit of a multi-step income statement is the demonstration of gross profit. This allows you to see how much the company is earning on sales before operating income is considered. Seeing detailed gross profit also allows you to calculate gross margin, which is gross profit divided by sales.

Step-by-step explanation: