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CVP income statement is arranged to show variable expenses, contribution margin and fixed expenses allowing a business to make cost volume profit decisions. CVP income statement is arranged to show variable expenses, contribution margin and fixed expenses allowing a business to make cost volume profit decisions.
Generally accepted accounting principles (GAAP) dictate the accrual basis, The mechanics of accounting for prepaid expenses and unearned revenues can be carried out in several ways. At left below is a balance sheet approach for Prepaid Insurance.