The underlying principle that absorption costing satisfies is the
A)Matching principle
B)Relevance principle
C)Historical cost principle
D)Understandability principle

Question

Quizplus · Accepted Answer

Absorption costing follows the matching principle, which means that it matches the cost of producing goods with the revenue generated from selling those goods. This includes both variable and fixed costs in the product cost, making it a better measure of profitability and satisfying the matching principle.

The Underlying Principle That Absorption Costing Satisfies Is the