Some Indirect Costs May Be Allocated on the Basis of Departmental

question 69

True/False

Some indirect costs may be allocated on the basis of departmental sales in proportion to total sales.

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Definitions:

Interest Charged

The cost incurred for borrowing money or the amount earned on deposited funds, usually expressed as a percentage of the principal.

Contingent Liability

A potential financial obligation that may arise depending on the outcome of a future event.

Contingent Liabilities

Liabilities that may arise from past transactions if certain events occur in the future.

Interest Expense

The cost incurred by an entity for borrowed funds; interest expense is a non-operating expense shown on the income statement.