Identify two critical items of a multistep income statement

Assignment Help Accounting Basics

Reference no: EM133487837

Problem

Part I: Respond to the following:

Distinguish between the income statement of a service company and a merchandising company. Identify at least two critical items of a multistep income statement of a merchandising company that are useful to creditors. Provide a rationale for your response.

Part II: Be sure to respond to your classmate's (Kristen Jones) post below:

Distinguish between the income statement of a service company and a merchandising company. A merchandising company's income statement will list the "cost of goods sold" as where a service company's income statement will not list the "cost of goods sold" because a service company does not keep inventory.

Identify at least two critical items of a multistep income statement of a merchandising company that are useful to creditors. The critical items of a multistep income statement of a merchandising company are cost of goods sold, expenses, and revenue. These are the most important items because all three items are used to calculate the company's net income.

Reference no: EM133487837

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