Basic Guidelines That Should Be Followed When Allocating Support Department

question 51

Multiple Choice

Basic guidelines that should be followed when allocating support department costs include

• A) actual costs should always be used for allocations.
• B) budgeted costs, not actual costs, should be allocated.
• C) service department costs should never be allocated at the beginning of the period.
• D) both a and b.

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Definitions:

Actuarial Information

Data used by actuaries to calculate and assess risks, premiums, liabilities, and retirement benefits, based on statistical and mathematical models.

Bond Issue

A bond issue refers to the process by which a borrower issues bonds to investors in order to raise capital, under specific terms regarding the repayment of the principal and periodic interest payments.

Yield Interest

The interest generated from an investment, usually expressed as an annual percentage of the investment's cost.

Present Value

Today's value of a future money sum or series of cash flows, estimated using an agreed upon return rate.