Single-Step vs. Multiple-Step Financial Statements | Principles of Accounting

Course Hero's Principles of Accounting video series covers the essentials of introductory accounting. Our short digest covers everything you need to know about the accounting cycle, accounting systems and controls, accounting for receivables and long-term assets, accounting for liabilities and equities, entity organizations and business analysis.

The video series begins with an introduction to Generally Accepted Accounting Principles (GAAP) and an exploration of accounting systems. It continues with an exploration of journalizing, trial balances, and the adjusting process that leads to the creation of the four major financial statements companies produce: income statement, statement of owner’s equity, balance sheet and statement of cash flows.

Along the way, you'll learn about:
• GAAP and other legal requirements for accounting and reporting
• The Accounting Equation
• Single-Step and Multiple-Step Financial Statements
• Double-Entry and Manual Accounting Systems
• The General Ledger and Chart of Accountings
• Trial balances and the adjusting process
• Ethical standards in accounting

The series continues by providing a deeper understanding of how entities employ accounting principles, including:
• Accounting for merchandising businesses, including inventory costing methods and systems
• Internal and cash controls
• Accounting for receivables and long-term assets
• Accounting for current liabilities and payroll, long-term liabilities and investments
• Categories of businesses and the four types of business entities
• Corporate annual reports

Finally, the Principles of Accounting crash course includes a primer on business analysis tools, including preparation of a statement of cash flows and the uses ratio analysis.

Additional concepts we cover in these quick videos include: accounts payable, accrual basis accounting, cash basis accounting, Financial Accounting Standards Board (FASB), periodic and perpetual inventory systems, horizontal analysis, vertical analysis, liquidity analysis, matching principle, proprietorship, limited liability company (LLC), partnerships, operating income, Sarbanes-Oxley Act (SOX), subsidiary ledgers and single-step income statements.

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[rhionysmael]

Thank you for this video. It helped with my assignments to better understand the simple and multi step IC.

[PunmasterSTP]

Thanks for helping us *step* up our accounting game!

[xiaowenjiang]

This video contains information that is so wrong on multiple levels:
First, GAAP allows both single step and multiple step income statements.
Second, the key distinction of a single step income statement is that it does not lead the user to focus on only one of its multiple lines of businesses that the firm may have, whereas a multiple step income statement does. In reality, many very large public companies use single step income statement, for instance, GE!
Third, multiple step and single step income statements each have pros and cons. Whether one provides more useful information to the users depends on the particular business. To claim that multiple step income statements are more useful is simply unfounded.

[kalrebai]

I Like it how he spent so much time talking about the basic cogs etc ... but not what the single step income statement does not include or what all multi step categories include and exclude .... very very basic