In the Accompanying Commentary to the Current Version of IAS

question 45

Multiple Choice

In the accompanying commentary to the current version of IAS 1/AASB 101, what is the recommended title for the balance sheet?

• A) Balance sheet
• B) Statement of assets and liabilities
• C) Statement of financial position
• D) Statement of changes in equity

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Definitions:

Variable Costing

An accounting method that only includes variable costs (costs that vary with production levels) in product costs and treats fixed costs as period costs expensed in the period incurred.

Manufacturing Margin

The difference between the sales revenues generated from manufactured goods and the cost of goods sold, indicating the profitability of production.

Contribution Margin

The difference between the sales revenue generated from a product or service and the variable costs associated with its production and sales.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold and excludes fixed manufacturing overhead.