Which of the following methods is required for external financial reporting?
A) Contribution approach
B) Variable costing
C) Direct costing
D) Absorption approach

Question

Quizplus · Accepted Answer

The absorption approach is required for external financial reporting as it is the most widely accepted method of accounting for inventory and costing products for financial reporting purposes. The contribution approach, variable costing, and direct costing are used for internal management decisions and are not typically used for external financial reporting.

Which of the Following Methods Is Required for External Financial