The Joint-Cost Allocation Method That Recognizes the Revenues at Split-Off

question 12

Multiple Choice

The joint-cost allocation method that recognizes the revenues at split-off but does not consider any further processing costs is the:

• A)relative-sales-value method.
• B)net-realizable-value method.
• C)physical-units method.
• D)reciprocal-accounting methoD.
• E)gross margin at split-off method.

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Definitions:

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Operating Cycle

The average period of time between the purchase of goods or services and the receipt of cash from sales, typical in the context of a company's day-to-day operations.

APB Opinion No.22

A guideline issued by the Accounting Principles Board that requires companies to disclose their accounting policies in their financial statements.

Significant Accounting Policies

The specific principles, bases, conventions, rules, and practices applied by a firm in preparing and presenting financial statements.