The Following Income Statements Are Produced According to Generally Accepted

question 14

Multiple Choice

The following income statements are produced according to generally accepted accounting principles:

• A)Variable costing
• B)Absorption costing
• C)Throughput costing
• D)Standard costing

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Definitions:

Straight-line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its expected useful life.

Double Declining-balance

An accelerated depreciation method that counts the expense twice as fast as the straight-line method, reducing the value of an asset more quickly.

Net Income

The amount of profit left after all expenses, taxes, and costs are subtracted from a company’s total revenue; synonymous with net profit.

Tax Purposes

Describes the reasoning or intention behind financial decisions or calculations made to comply with tax laws and regulations.