In preparing a segment margin income statement, instead of looking for a certain phrase that describes the cost, look for the reason the cost was incurred.

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In preparing a segment margin income statement, it is important to identify the reason why a cost was incurred in order to properly allocate and assign it to a particular segment. Looking for a specific phrase may not always accurately reflect the nature and purpose of the cost.

In Preparing a Segment Margin Income Statement, Instead of Looking