Generally Accepted Accounting Principles require the use of direct costing for financial reporting purposes.

Name: Generally Accepted Accounting Principles require the use of direct costing for financial reporting purposes.
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Generally Accepted Accounting Principles (GAAP) require the use of absorption costing for financial reporting purposes, not direct costing. However, direct costing may still be used for internal management purposes.

Generally Accepted Accounting Principles Require the Use of Direct Costing