Under the __________ Method of Allocating Service Department Costs, Services

question 4

Multiple Choice

Under the __________ method of allocating service department costs, services provided by service departments to other service departments are ignored and all service department costs are allocated directly to the operating departments.

• A) step-down
• B) weighted-average
• C) direct
• D) FIFO

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Definitions:

Interest Income

Interest income is the revenue earned from deposit accounts or investments through the lending of money or the use of capital.

Bond Premium

The amount by which the market price of a bond exceeds its principal amount or face value.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.