Which of the following statements is true regarding the traditional income statement?

Question

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The traditional income statement is designed primarily for external reporting purposes. It follows a format that is in accordance with generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS), focusing on presenting the financial performance of a company over a specific period in a manner that is useful for shareholders, investors, and creditors. It does not specifically categorize costs by behavior (fixed vs. variable) nor does it typically include a subtotal for contribution margin, which are features more common in a contribution margin income statement used for internal decision-making. Sales revenue in the traditional income statement is based on the units sold, not produced.

Which of the Following Statements Is True Regarding the Traditional