The Single-Step Income Statement
There are several formats in which an income statement can be constructed. The simplest format is the single-step income statement, where you present a single subtotal for all revenue line items, and a single subtotal for all expense line items, with a net gain or loss appearing at the bottom of the report.
Here is a sample format for a single-step income statement:
|Cost of goods sold||350,000|
|Salaries and wages||400,000|
|Travel and entertainment||50,000|
The single-step format is not heavily used, because it forces the readers of an income statement to separately summarize information for subsets of information within the income statement. For example, there is no gross margin calculation, nor any expense breakdowns by department. For a more readable format, try the multi-step format.