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.

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Definitions:

Potential Liability

A legal obligation that might occur in the future, depending on the outcome of a particular event.

Authorized Agent

An individual or entity that has been given the legal authority to act on behalf of another person or entity in business transactions or negotiations.

Primary Liability

The foremost responsibility to pay or perform under a legal obligation, without recourse to others for reimbursement.

Secondary Liability

Legal responsibility that arises from helping, enabling, or indirectly contributing to the infringement or wrongdoing by another.