If a Company Allocates Costs of Central Services to Products

question 68

Multiple Choice

If a company allocates costs of central services to products based on sales,________ should be used as the allocation base.

• A) actual usage
• B) estimated usage
• C) actual sales
• D) budgeted sales

Understand the major components and purposes of internal control systems.

Describe the characteristics and advantages of a voucher system.

Understand the principles and benefits of electronic funds transfers (EFT).

Apply journal entry preparation skills for cash transactions, including cash collections and petty cash fund management.

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Definitions:

Oral Contracts

Agreements between parties that are made verbally and not recorded in written form, yet are still legally binding under certain conditions.

UCC

The Uniform Commercial Code is an extensive collection of statutes that regulate every aspect of commercial dealings across the United States.

Proper Electronic Form

A format for electronic documents that meets legally recognized standards and requirements for validity and enforceability.

Usage of Trade

Refers to the customs and practices commonly observed and accepted in a particular industry or trade.