GAAP-based income statements categorize expenses based on
A)Business function
B)Cost behavior
C)Dollar amount
D)Contribution margin

Question

Quizplus · Accepted Answer

GAAP-based income statements categorize expenses based on business function, which means expenses are grouped based on the area of the company where they are incurred, such as selling, general and administrative, research and development, etc. Cost behavior and contribution margin are not used to categorize expenses in GAAP-based income statements, and dollar amount alone is not a sufficient criterion for expense classification.

GAAP-Based Income Statements Categorize Expenses Based on