ces A single-step income statement: Is not permitted when financial statements are prepared in accordance with generally accepted accounting principles Reports the same amount of net income as that reported on a multiple-step income statement. Reports revenues and expenses, but not gains and losses. Always includes a gross profit subtotal. Never includes selling expenses. When a classified balance sheet is prepared, merchandise inventory is: Not reported as a current asset because it is not sufficiently liquid. Usually listed after prepaid expenses according to its nearness to liquidity. Reported as a current asset. Usually reported before accounts receivable according to its nearness to liquidity. Reported as a current liability