A Challenge in Calculating the Total Costs and Expenses of a Department

question 65

Multiple Choice

A challenge in calculating the total costs and expenses of a department is:

• A)Determining the gross profit ratio.
• B)Assigning direct costs to the department.
• C)Allocating indirect expenses to the department.
• D)Determining the amount of sales of the department.
• E)Determining the direct expenses of the department.

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Definitions:

Accounts Receivable Control

Practices and procedures in place to monitor and manage the amounts owed to a business by its customers for goods or services delivered on credit.

Subsidiary Ledger

A detailed ledger that contains supporting information for a main accounting ledger, often used for accounts receivable or accounts payable.

Cash Receipts Journal

An accounting ledger in which all cash inflows or receipts are recorded.

Accounts Payable Subsidiary

A detailed ledger containing all individual creditor accounts, supporting the summary-level accounts payable figure in the general ledger.