GAAP allows companies to use ________________ for external reporting purposes.
A)only the traditional format of the income statement
B)only the contribution margin format of the income statement
C)either the traditional format or the contribution margin format
D)the variable costing format

Question

Quizplus · Accepted Answer

GAAP requires companies to use the traditional format of the income statement for external reporting purposes, which includes categorizing expenses by function (e.g., cost of goods sold, selling, general and administrative expenses). The contribution margin format is typically used for internal management purposes.

GAAP Allows Companies to Use ________________ for External Reporting Purposes