Divisional income statements do not have to follow generally accepted accounting principles (GAAP)because they are internal reports.

Question

Quizplus · Accepted Answer

Divisional income statements are used for internal purposes only, therefore they do not have to follow the same accounting principles as external financial statements that are published for the public. However, internal reporting should still adhere to certain standards in order to maintain reliability and consistency.

Divisional Income Statements Do Not Have to Follow Generally Accepted