All of the following statements are true regarding the contrast between income statements for managerial use with those for external reporting except:
A)Income statements for external reporting show variable and fixed costs.
B)Income statements for external reporting typically aggregate data more than those used for managerial purposes.
C)Income statements for external reporting comply with income tax regulations and financial accounting principles.
D)Operating profit is used at the bottom of income statements prepared for managerial use.

Question

Quizplus · Accepted Answer

Income statements for external reporting generally do not show variable and fixed costs separately, unlike income statements for managerial use. External income statements are primarily concerned with presenting a clear picture of the company's financial performance and compliance with accounting standards and tax regulations, and hence do not delve into the details of cost structures and operational nuances that managers need to make decisions. Aggregation of data is also more common in external income statements to simplify reporting and facilitate investor understanding.

All of the Following Statements Are True Regarding the Contrast