Which Accounting Method Is Used for External Reporting

question 64

Multiple Choice

Which accounting method is used for external reporting?

• A) variable costing
• B) absorption costing
• C) transfer price costing
• D) responsibility costing

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Definitions:

Liquidated Damages

A bona fide estimate of the monetary damages that would flow from the breach of a contract.

Consequential Damages

Indirect damages that do not flow directly from the act but occur as a consequence of the initial act, often involving loss of profit or other secondary losses.

Liquidated Damages

A pre-determined sum agreed upon by parties in a contract as compensation for breach of contract, where actual damages are difficult to ascertain.