Final answer:
The statement is true; a multiple-step income statement does distinguish between operating and non-operating activities, providing a detailed view of a company's income and expenses.
Step-by-step explanation:
The statement 'A multiple-step income statement distinguishes between operating and non-operating activities' is True. A multiple-step income statement is an income statement that separates operational revenues and expenses from non-operational revenues and expenses. The primary benefit of this format is that it provides users with a detailed view of the different streams of income and expenses that a company has and how they contribute to the overall net income.
Operational activities typically include anything related to the day-to-day business functions, such as sales revenue, cost of goods sold (COGS), and operating expenses like salaries, rent, and utilities. Non-operating activities, on the other hand, include revenues and expenses that are outside of the core business operations. Examples of non-operating items are interest income, gain or loss on sales of assets, and expenses like interest expense.
The distinction is important for stakeholders who want a clear understanding of a company's core operations versus its other financial activities. This helps in better financial analysis and decision-making.