A Traditional GAAP Income Statement Does Not Help Managers Predict

question 128

Multiple Choice

A traditional GAAP income statement does not help managers predict the financial results of their decisions.Which of the following is a reason for this shortcoming?

• A)The GAAP statement is based on cost function rather than cost behavior.
• B)The GAAP statement is based on classification rather than function.
• C)The GAAP statement is based on cost behavior rather than cost function.
• D)The GAAP statement is based on function rather than classification.

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Definitions:

Builds

Refers to versions or iterations of a software, project, or construction that are progressively compiled and developed.

Functional Animation

Animation used to enhance understanding or usability in digital interfaces, rather than purely for entertainment.

Direct Approach

A communication strategy characterized by getting straight to the main point or purpose without unnecessary preamble.

Annual Summit

A yearly gathering or meeting, often involving leaders or members of a certain industry or organization, to discuss significant topics and make decisions.