An Entity Should Recognise the Cost Fo of Profit Sharing

question 2

True/False

An entity should recognise the cost fo of profit sharing plans as an expense not as a distribution of profits.

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Definitions:

Marginal Benefits

The incremental satisfaction or advantage obtained from the consumption of an additional unit of a good or service.

Marginal Cost

Marginal cost is the increase in total production cost that arises from producing one additional unit of a good or service.

350-seat Plane

An aircraft designed to accommodate 350 passengers, often used for long-haul international flights.

Airline

A company that provides air transport services for traveling passengers and freight.