
Concept explainers
(a)
Multi step income statement
A multiple step income statement refers to the income statement that shows the operating, and non-operating activities of the business, under separate head. In different steps of the multi-step income statement, principal operating activities are reported that starts from the record of sales revenue with all contra sales revenue account like sales returns, allowances and sales discounts.
To determine: Multiple-step income statement.
(b)
Gross profit rate
It is the financial ratio that evaluates the money left out of the total revenues after deducting the cost of goods sold. Thus, it shows the relationship between the gross profit on sales and net sales.
To determine: Gross profit rate.

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Chapter 5 Solutions
Accounting Principles 12th Edition
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