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What is a single-step income statement?

Harold Averkamp, CPA, MBA

Single-Step Income Statement Definition

A single-step income statement arrives at a company’s net income in one step or subtraction: [total revenues and gains] – [total expenses and losses].

Example of a Single-Step Income Statement

Here is an example of a condensed single-step income statement for a hypothetical sole proprietorship (with our added notation of A, B, and A-B):

single-step income statement

Notice these items on the single-step income statement:

  • There is only one subtraction: $3,994 – $3,764 = $230
  • The operating revenues, nonoperating revenues, and gains are combined into one total of $3,994
  • The operating expenses, nonoperating expenses, and losses are combined into one total of $3,764
  • The company’s gross profit is not shown as a subtotal. However, the gross profit can be calculated by subtracting the cost of sales from net sales

While the single-step format is not cluttered with multiple subtotals, it requires the reader to compute the gross profit and operating income from the amounts listed.

Single-Step vs Multiple-Step

An alternative income statement format that does not combine the operating and nonoperating amounts and shows explicitly the company’s gross profit and operating income, is the multiple-step income statement.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on

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