Amortization Expense Is an Example of the Need for Accountants

question 111

True/False

Amortization expense is an example of the need for accountants to make estimates in order to record adjustments.

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Definitions:

Variable Costing

An accounting method that only considers variable costs (costs that change with production volume) when calculating the cost of goods sold and in the determination of profitability.

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and variable overhead) in product cost calculations, excluding fixed overhead.