For Each of the Following Generally Accepted Accounting Principles, Identify

question 3

Essay

For each of the following generally accepted accounting principles, identify an alternative acceptable accounting principle.
a. Installment method
b. Operating lease
c. Straight-line, depreciation
d. Last-in, first-out

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Definitions:

Variable Manufacturing Costs

Expenditures that shift in accordance with the volume of output, like raw materials and direct labor costs.

Selling Commission

A fee paid to salespersons or agents for selling a company's products or services, usually a percentage of the sale price.

Net Operating Income

An accounting term representing the profit derived from a company's everyday, non-financial activities and excluding extraordinary items.

CVP Analysis

Short for Cost-Volume-Profit Analysis, it's a management accounting technique used to analyze how changes in costs and volume affect a company’s operating income and net income.