GAAP (Generally Accepted Accounting Principles)requires the Use of Accrual Basis

question 7

True/False

GAAP (Generally Accepted Accounting Principles)requires the use of accrual basis of accounting for external financial reporting purposes.

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Definitions:

Variable Costing

A technique in accounting that encompasses only costs that vary with production (including direct materials, direct labor, and variable manufacturing overhead) in the pricing of products.

Period Cost

Expenses that are not directly tied to the production of goods and are instead associated with time periods, such as administrative salaries.

Variable Costing

A method of cost accounting where only variable production costs are included in product costs, with fixed overhead expenses treated as period costs.

Unit Product Cost

The total cost associated with producing a single unit of a product, calculated by dividing the total production costs by the number of units produced.