Because This Allocation Method Recognizes That Service Departments Often Provide

question 30

Multiple Choice

Because this allocation method recognizes that service departments often provide each other with interdepartmental service, it is theoretically considered to be the most accurate method for allocating service department costs to production departments. This method is: (CMA adapted)

• A) Direct method.
• B) Variable method.
• C) Linear method.
• D) Reciprocal method.

---

Definitions:

Drawer

The person who writes or issues a check or draft instructing the bank to pay a specified sum to the named beneficiary.

Drawee

The party on whom a check, draft, or bill of exchange is drawn and who is ordered to pay the specified amount.

Promissory Note

A written, legally binding agreement in which one party promises to pay a defined sum of money to another party under specific conditions.

Article 3

Often refers to a section of a constitutive document of an organization, treaty, or a part of a legal code detailing specific provisions related to governance, legal processes, or rights.