The multi-step income statement presents expenses according to its function.

The multi-step income statement is used only in a service type of business.

Sales are the main sources of revenue in a merchandising business.

Net income is sales less cost of goods sold

Administrative Expenses are the expenses necessary in the management of the office.

Selling Expenses are the expenses directly related to the selling of a product or service.

Other income including gains is income derived from sources other than the company's main line of business.

Net Purchases are purchases less purchases returns and allowances and purchase discount

Interest expense is also known as finance cost.