The _______________ approach to the income statement organizes costs by function.
A) contribution
B) traditional
C) comparable
D) None of these is true.

Question

Quizplus · Accepted Answer

The traditional approach to the income statement organizes costs by function, such as cost of goods sold, selling expenses, and general and administrative expenses. The contribution approach, on the other hand, distinguishes between fixed and variable costs to determine contribution margin, while the comparable approach compares the financial performance of a business to other businesses in the same industry.

The _______________ Approach to the Income Statement Organizes Costs by Function