Following Generally Accepted Accounting Principles,the income statement issued to investors and creditors must ________.
A)be prepared in the traditional format
B)be prepared using variable costing
C)be prepared in the contribution margin format
D)show the value of contribution margin

Question

Quizplus · Accepted Answer

According to Generally Accepted Accounting Principles, the income statement should be prepared in the traditional format, which presents revenues and expenses for a specific period of time, resulting in net income or loss. Variable costing and contribution margin format are alternative methods of presenting income statements that are not required by accounting standards. Showing the value of contribution margin is important for internal management purposes but not mandatory for external financial reporting.

Following Generally Accepted Accounting Principles,the Income Statement Issued to Investors