Which of the Following Allocation Methods Fully Recognizes Services That

question 90

Multiple Choice

Which of the following allocation methods fully recognizes services that support departments provide to each other?

• A)direct method
• B)sequential method
• C)reciprocal method
• D)multi-step method

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Definitions:

Drawing

The account used to record amounts withdrawn by an owner of a proprietorship.

Closing Entry

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, clearing out revenues and expenses for the next period.

Wages Expense

The total cost incurred by a company for paying its employees, often reflected as an operating expense on the income statement.

Rent Expense

The cost incurred by a business to utilize property or equipment for operations, which is recorded as an expense on the income statement.