Which Is the True Statement

question 169

Multiple Choice

Which is the true statement?

• A) In a CVP income statement costs and expenses are classified only by function.
• B) The CVP income statement is prepared for both internal and external use.
• C) The CVP income statement shows contribution margin instead of gross profit.
• D) In a traditional income statement costs and expenses are classified as either variable or fixed.

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Definitions:

Net Income

The total earnings of a company after all expenses, including taxes and operating costs, have been deducted from total revenue.

Earnings Per Share

A financial ratio that measures the amount of a company’s profit allocated to each outstanding share of common stock, indicating the company's profitability.

Common Shareholders

Individuals or entities that own common stock in a corporation, thus holding a share of the ownership and typically having voting rights.

Public Company

A company whose shares are traded freely on a stock exchange, subject to regulatory and reporting requirements.