Which of the Following Methods Ignores the Fact That Some

question 58

Multiple Choice

Which of the following methods ignores the fact that some service departments provide service to other service departments?

• A)Direct method.
• B)Indirect method.
• C)Step-down method.
• D)Reciprocal methoD.
• E)Dual-cost allocation method.

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Definitions:

Straight-line Method

A method for calculating depreciation of an asset, which assumes the asset will lose an equal amount of value each year over its useful life.

Depreciation Expense

The allocation of the cost of an asset over its useful life, reflecting the decrease in value of the asset over time due to usage, wear and tear, or obsolescence.

Telephone System

A communication network designed for the purpose of transmitting voice over distances.

Useful Life

The estimated duration an asset is expected to be functional and valuable for, used for depreciation calculations.