Which of the Following Is Not an Advantage of the Direct

question 86

Multiple Choice

Which of the following is not an advantage of the direct method?

• A)The benefit is simplicity.
• B)The direct method is easy to use.
• C)No need to predict the usage of support department services by other departments.
• D)It ignores information about reciprocal services provided among support departments.
• E)None of these are disadvantages.

---

Definitions:

Fair Value

The estimated market price of an asset or liability, reflecting the price at which an orderly transaction would take place between market participants at the measurement date.

Balance Sheets

A financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time, giving insight into its financial position.

Allowance

An amount set aside as a reduction or probable future expenses or losses, such as an allowance for doubtful accounts.

Equipment

Tangible assets used in the operation of a business, such as machinery, tools, and vehicles, not intended for sale.