The single-step income statement format uses 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. This format is most commonly used by businesses that have relatively simple operations, with few line items reported. 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, which is the format of choice for multi-department organizations. It is relatively common for smaller businesses to start reporting their financial results with a single-step income statement and then switch to the multi-step format once their operations become larger and more complex.