Which of the Following Is True of the Traditional Format

question 47

Multiple Choice

Which of the following is true of the traditional format of the income statement?

• A)It is prepared under the variable costing method.
• B)It shows contribution margin as a line item.
• C)It is not allowed under the US GAAP.
• D)It is prepared under the absorption method.

---

Definitions:

Accounts Receivable

Funds that customers have yet to pay a company for the products or services they have received.

Contra Account

An account used in the ledger to offset the balance of a related account.

Carrying Amount

The net value of an asset as recorded in the books, which is equal to the asset's original cost minus any accumulated depreciation, amortization, or impairment charges.