What is a Single Step Income Statement?

Single Step Income Statement

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Single Step Income Statement

A single step income statement is one of the simplest formats for presenting a company’s profitability over a specified period. Unlike the multi-step income statement, which segregates operating revenues and expenses from non-operating revenues and expenses, the single step format consolidates all revenue sources into a single category and all expenses into another, leading to a single “step” to determine the net income.

Format of a Single Step Income Statement:

[Company Name]
Income Statement
For the Year Ended [Date]

– Sales Revenue
– Interest Income
– Rent Income
– [Other Revenue Items]
Total Revenues: XXXX

– Cost of Goods Sold
– Selling Expenses
– Administrative Expenses
– Interest Expense
– [Other Expense Items]
Total Expenses: YYYY

Net Income: (Total Revenues – Total Expenses) = ZZZZ


  • Simplicity: Easy to prepare and read.
  • Clarity: Provides a clear picture of total revenues and total expenses without going into categorizations.


  • Lack of Detail: Doesn’t provide detailed insight into operations vs. non-operations related profits or expenses.
  • Less Analytical Utility: Not as useful for management or external parties who want to analyze operational efficiency, gross profit margins, or other key performance metrics.

Example of a Single Step Income Statement

Let’s create a hypothetical single step income statement for a fictional company named “Bright Lights Bookstore” for the year ending December 31, 2023.

Bright Lights Bookstore
Income Statement
For the Year Ended December 31, 2023

Sales of Books: $450,000
Cafe Sales: $100,000
Rental Income (Event Space): $25,000
Interest Income: $2,000
Total Revenues: $577,000

Cost of Books Sold: $250,000
Cafe Supplies: $40,000
Salaries and Wages: $150,000
Rent: $50,000
Utilities: $10,000
Advertising Expenses: $20,000
Depreciation: $15,000
Interest Expense: $5,000
Miscellaneous Expenses: $7,000
Total Expenses: $547,000

Net Income:
Total Revenues – Total Expenses = $30,000

From this single step income statement for Bright Lights Bookstore, we can see that all revenue streams are grouped together at the top, and all expenses are grouped together beneath them. The net income is then simply calculated by subtracting total expenses from total revenues.

It provides a straightforward look at the company’s profitability but lacks the more detailed breakdowns of the multi-step format, which differentiates between core operations and other activities.

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