The Direct Method of Departmental Cost Allocation Ignores

question 44

Multiple Choice

The direct method of departmental cost allocation ignores:

• A)The managers' bias.
• B)Accrual accounting.
• C)Tax implications.
• D)Long-term implications.
• E)Reciprocal flows.

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Definitions:

Fees Earned

Income received from providing services.

Wages Expense

The total cost incurred by a business for the payment of wages to employees for a specific period.

Proprietorship

A proprietorship, also known as a sole proprietorship, is a type of business that is owned and run by one individual and where there is no legal distinction between the owner and the business entity.

Liabilities

Liabilities are financial obligations or debts that a company owes to others, to be settled over time through the transfer of economic benefits including money, goods, or services.