The Correspondence Principle Says

question 1

Multiple Choice

The Correspondence Principle says:

• A) Every tax that is collected should have a corresponding fund in the government budget.
• B) Governments who provide the public good or service should be funded by those who consume the good
• C) Governmental responsibility for a function should be provided at the highest level of government that can deliver the function effectively.
• D) When one city creates a good public service, other cities will follow.

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Definitions:

Direct Method

An accounting method used to allocate service department costs directly to producing departments without considering services rendered between service departments.

Cost of Goods Sold

The immediate expenses directly related to the manufacture of products sold by a business, encompassing costs for materials, labor, and overhead.

Comparative Balance Sheet

A financial statement that presents the financial position of a company at two or more different points in time, side-by-side, to facilitate comparison.

Direct Method

An accounting approach where costs are directly traced to objects, such as products or services, without using cost drivers or allocation bases.