Generally Accepted Accounting Principles (GAAP) require the use of which accounting method for external reporting?
A) absorption costing.
B) variable costing.
C) transfer price costing.
D) responsibility costing.
E) all of these are acceptable for GAAP.

Question

Quizplus · Accepted Answer

GAAP requires the use of absorption costing for external reporting. Absorption costing takes into account all manufacturing costs, including fixed overhead, when valuing inventory and determining cost of goods sold. Variable costing and transfer price costing are not typically used for external reporting, and responsibility costing is not a specific accounting method.

Generally Accepted Accounting Principles (GAAP) Require the Use of Which