The Process of Allocating Fixed and Variable Costs Separately Is

question 79

Multiple Choice

The process of allocating fixed and variable costs separately is called:

• A) the separate allocation procedure (SAP).
• B) diverse allocation.
• C) reciprocal-cost allocation.
• D) common-cost allocation.
• E) dual-cost allocation.

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Definitions:

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenditure to the correct period.

Interest Payment

The amount paid by a borrower to a lender as a charge for borrowing money, usually expressed as an annual percentage of the principal amount.

Note Settlement

The process of satisfying the obligations of a promissory note, typically involving the repayment of the principal and accrued interest.

Past Due Account

An account that has not been paid by the deadline, resulting in overdue payments.