If a Cost Must Be Arbitrarily Allocated in Order to Be

question 289

True/False

If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost should be considered a common cost.

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Definitions:

Government-Owned Landfill

A waste disposal facility owned and operated by a governmental entity for the management of trash and recyclables.

Accrued

Expenses or revenues that have been incurred but not yet recorded in the company's accounts during the accounting period.

Pro-Rated Basis

The allocation of amounts or costs in proportion to some factor, such as time or usage.

Special Purpose Government

A form of government created for a specific, targeted purpose or project, often with a narrow scope of responsibilities compared to general-purpose local governments.