Which of the Following Is True of the Traditional Format

question 43

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 GAAP.
• D) It is prepared under the absorption method.

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Definitions:

Biweekly Paycheck

A payment method where employees receive wages every two weeks, resulting in 26 paychecks per year.

Compounded Monthly

The interest calculation method where interest is added to the principal balance monthly, leading to interest on interest.

Conservative Investment

An investment strategy focused on preserving capital and generating a reliable, but possibly lower, return.

Retirement Account

A financial account specifically designated for saving and investing for retirement, offering tax benefits.