Final answer:
The statement is true; a multi-step income statement shows intermediate subtotals like gross profit, operating income, and income before taxes, allowing detailed financial analysis.
Step-by-step explanation:
The statement that the multi-step format of the income statement reports a series of intermediate subtotals such as gross profit, operating income, and income before taxes is True. The multi-step income statement provides a detailed analysis of a company's financial performance by separating operating revenues and expenses from non-operating ones, which aids stakeholders in understanding the various areas that contribute to the firm's net income. This format helps to calculate after-tax income by starting with national income and subtracting taxes, leading to the concept of taxable income being adjusted gross income less deductions and exemptions. From this after-tax income, various financial indicators, such as imports and aggregate expenditure can be derived. Crucially, remember that for each business, the fundamental equation is Profit = Total Revenue - Total Cost.