Generally Accepted Accounting Principles (GAAP) Require the Use of Which

question 76

Multiple Choice

Generally Accepted Accounting Principles (GAAP) require the use of which accounting method for external reporting?

• A) absorption costing.
• B) variable costing.
• C) transfer price costing.
• D) responsibility costing.
• E) all of these are acceptable for GAAP.

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Definitions:

Static Budget

A budget that is based on fixed assumptions and does not change with variations in business activity levels.

Master Budget

A comprehensive financial planning document incorporating all of an organization's financial plans, including sales, production, and cash budgets.

Overhead Budget

An estimation of variances and anticipated indirect costs associated with the normal operations of a business.

CVP Graph

A visual representation of the Cost-Volume-Profit analysis, showing the relationship between cost, volume, and profit.