The Gross-Margin Format of the Income Statement

question 188

Multiple Choice

The gross-margin format of the income statement:

• A)is used with variable costing.
• B)distinguishes variable costs from fixed costs.
• C)is used with absorption costing.
• D)calculates contribution margin.

---

Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in the time value of money calculations.

Goodwill

An intangible asset that represents the excess value of a company's fair market value over the net assets of a business it acquires.

Impairment

The diminution in the recoverable value of an asset below its carrying amount, reflecting a decline in the quality, quantity, or market value of the asset.

AASB 136

The Australian Accounting Standards Board standard on impairment of assets, providing guidelines on how an entity should test for and recognize impairment.