Which of These Is Not an Allocation Method Commonly Used

question 6

Multiple Choice

Which of these is not an allocation method commonly used to allocate support department costs to operating departments?

• A) indirect method
• B) direct method
• C) step-down method
• D) reciprocal method

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Definitions:

Note Payable

A written promissory note in which the borrower agrees to pay back a specified sum to the lender at a future date, with interest.

Unearned Fees

Income received by a business for services that have yet to be performed or delivered, considered a liability until the service is completed.

Unearned Revenue

Money received by a company for goods or services that have yet to be provided to the customer.

Accrued Wages

Salaries or wages that have been earned by employees but have not yet been paid by the company.