Which Allocation Base Is Best Used to Allocate Advertising Expense

question 97

Multiple Choice

Which allocation base is best used to allocate advertising expense by selling department?

• A) Square feet of spaced used
• B) Gross sales of each department as a percent of total gross sales
• C) An even split among all selling departments
• D) Some other method not listed

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Definitions:

Payment

The transfer of money, goods, or services in exchange for a product, service, or to satisfy an obligation.

Fixture

A fixture is an item that was originally personal property but has been attached to real property in such a way that it is legally considered a part of the real property.

UCC

Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, including sales, banking, and leases.

Oil

A natural, greasy liquid derived from petroleum, used primarily as fuel or in manufacturing.