FINANCIAL ACCOUNTING Definition

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FINANCIAL ACCOUNTING is the area of accounting concerned with reporting financial information to interested external parties.

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ABSORPTION COSTING is the method under which all manufacturing costs, both variable and fixed, are treated as product costs with non-manufacturing costs, e.g. selling and administrative expenses, being treated as period costs.

DIVIDEND RECEIVED DEDUCTION is the reduction of dividend income from the taxable income of the investing corporation, as provided in section 301 of the Internal Revenue Code. Currently, 70% of dividends received from nonaffiliated corporations may be excluded from taxable income.

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