When Preparing a Traditional Income Statement,it Is Necessary to Break

question 53

Multiple Choice

When preparing a traditional income statement,it is necessary to break down costs into what two categories?

• A) Direct materials and indirect materials
• B) Product and period
• C) Variable and fixed
• D) Avoidable and unavoidable

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Definitions:

Disposable Income

The reserve of funds households possess for spending and saving after income tax payments.

Savings

The portion of disposable income not spent on consumption of goods and services, set aside for future use.

Disposable Income

Net financial resources for households to allocate towards spending and savings after income taxation.

Savings

The portion of income not spent on consumption of goods and services, often put aside for future use or investment.