What is the income statement that is prepared for external reporting?
A)absorption-costing income statement and variable-costing income statement
B)full-costing income statement and contribution margin income statement
C)contribution margin income statement and variable-costing income statement
D)absorption-costing income statement and full-costing income

Question

Quizplus · Accepted Answer

The absorption-costing income statement and full-costing income statement are prepared for external reporting as they include all manufacturing costs (direct and indirect) and are required by generally accepted accounting principles (GAAP). The contribution margin and variable-costing income statements focus on the behavior of costs and are more often used for internal decision-making.

What Is the Income Statement That Is Prepared for External