Which of the following statement is false? O The only difference between absorption costing and variable costing is how the variable MOH is treated. O A traditional income statement uses absorption costing, where both variable and fixed manufacturing costs are included when calculating the product cost. O For external financial reporting purposes, GAP requires the traditional format income statement. O For external financial reporting purposes, companies need to classify their costs as product costs or period costs following GAAP.
Which of the following statement is false? O The only difference between absorption costing and variable costing is how the variable MOH is treated. O A traditional income statement uses absorption costing, where both variable and fixed manufacturing costs are included when calculating the product cost. O For external financial reporting purposes, GAP requires the traditional format income statement. O For external financial reporting purposes, companies need to classify their costs as product costs or period costs following GAAP.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Which of the following statement is false?
O The only difference between absorption costing and variable costing is how
the variable MOH is treated.
O A traditional income statement uses absorption costing, where both variable
and fixed
cost.
O For external financial reporting purposes, GAP requires the traditional
format income statement.
O For external financial reporting purposes, companies need to classify their
costs as product costs or period costs following GAAP.
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