The Most Useful Allocation Basis for the Departmental Costs of an Advertising

question 9

Multiple Choice

The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:

• A) Floor space of each department.
• B) Relative number of items each department had on sale.
• C) Number of customers to enter each department.
• D) An equal amount of cost for each department.
• E) Total sales of each department.

Understand the specific criteria established by GAAP for the treatment of leases.

Distinguish between capital and operating leases and their financial statement impact.

Recognize the depreciation, expense recognition, and balance sheet implications for leases under GAAP.

Understand the concept of executory costs in lease agreements and their accounting treatment.