The Main Difference Between Activity-Based Costing and Traditional Costing Systems

question 165

True/False

The main difference between activity-based costing and traditional costing systems is that activity-based costing uses a separate allocation base for each activity.

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Definitions:

Common Shares

Equity securities that represent ownership interest in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, often referred to as the bottom line.

Dividends

Distributions of a company's earnings given to its shareholders, typically originating from the company's profits.

Red Income

This term is also not recognized in standard economic discussions and might be used in a specific context that is not universally defined.