Final answer:
A single-step income statement simplifies financial reporting by not separately listing gross profit, cost of goods sold, or operating income. It shows total revenues including sales revenue and other gains, subtracted by total expenses to calculate net income.
Step-by-step explanation:
The single-step income statement is a simplified way to present the net income of a business. It does not separately report items like gross profit, operating income, or the cost of goods sold. Instead, it simply subtracts total expenses from total revenues.
According to the choices provided:
- (a) a single-step income statement does not report gross profit, which is typically shown on a multi-step income statement.
- (b) it also does not report the cost of goods sold separately from other expenses.
- (c) it does report sales revenue and "Other revenues and gains" together in the revenues section, distinguishing revenue from normal business operations and incidental or non-recurring transactions.
- (d) the single-step income statement does not report operating income separately, as it presents a broad overview rather than a detailed breakdown of operating and non-operating activities.
Profit is a fundamental concept in business, which is calculated as Total Revenue minus Total Cost, and can be influenced by various explicit costs as well as revenues from sales and other sources.