The Cost Object Is an Upholstered Chair Made by Craftsmen

question 98

Multiple Choice

The cost object is an upholstered chair made by craftsmen in a factory.An accountant can identify the amount and cost of fabric used to manufacture the chair.This is called ________ a ________ to a cost object.

• A) assigning; indirect cost
• B) allocating; indirect cost
• C) allocating; direct cost
• D) tracing; direct cost

---

Definitions:

Accounts Receivable Financing

A secured short-term loan that involves either the assignment or factoring of receivables.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount for immediate cash.

Short-Term Financial Plan

A strategic plan that outlines a company's financial activities and strategies for a short period, typically one year or less, to ensure liquidity and manage cash flows efficiently.

Loan Period

The duration of time from the beginning of a loan until it is fully repaid.