Which type of costing system is the only acceptable costing system for external financial reporting?
A)Prime costing
B)Out-of-pocket costing
C)Variable costing
D)Absorption costing

Question

Quizplus · Accepted Answer

Absorption costing is the only acceptable costing system for external financial reporting as it conforms to Generally Accepted Accounting Principles (GAAP) and presents a complete picture of a company's total costs, including both variable and fixed costs. This enables accurate product pricing and helps in making well-informed business decisions.

Which Type of Costing System Is the Only Acceptable Costing