Toggle between multiple-step and single-step on the same numbers.
| Sales | $200,000 |
|---|---|
| Less sales discounts | ($2,000) |
| Less sales returns and allowances | ($8,000) |
| Net sales | $190,000 |
| Cost of goods sold | ($114,000) |
| Gross profit | $76,000 |
| Selling expenses | ($30,000) |
| General and administrative expenses | ($25,000) |
| Income from operations | $21,000 |
| Other revenues and gains — interest revenue | $1,000 |
| Other expenses and losses — interest expense | ($2,000) |
| Net income | $20,000 |
A stops twice on the way down: at gross profit, and at income from operations, before other revenues and expenses join in. A format skips both stops — one revenue total, one expense total, one subtraction.
Net income comes out the same either way, because both formats total the same underlying accounts. promote sales; run the business itself.