All of the Following Statements Are True Regarding the Contrast

question 69

Multiple Choice

All of the following statements are true regarding the contrast between income statements for managerial use with those for external reporting except:

• A)Income statements for external reporting show variable and fixed costs.
• B)Income statements for external reporting typically aggregate data more than those used for managerial purposes.
• C)Income statements for external reporting comply with income tax regulations and financial accounting principles.
• D)Operating profit is used at the bottom of income statements prepared for managerial use.

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Definitions:

Income Statement

A financial report that calculates a company's performance over a specific period, summarizing revenue, expenses, and profits.

Expense Recognition Principle

An accounting principle that dictates that expenses should be recognized in the period in which they contribute to the generation of revenue.

Income Statement

A financial report that shows a company's revenues, expenses, and profits over a specific period, indicating its financial performance.

Incurred

Refers to costs or expenses that have been recognized or acquired, usually due to a company's operations or activities.