Which of the Following Allocation Methods Assumes "Step-Down" Interdepartmental Services

question 124

Multiple Choice

Which of the following allocation methods assumes "step-down" interdepartmental services?

• A) direct method
• B) sequential method
• C) reciprocal method
• D) all of these

---

Definitions:

Specific Identification

A method of inventory costing where each item in inventory is uniquely identified, allowing for the precise tracking of cost of goods sold and inventory levels.

Cost Flow

The manner in which costs move through a company's inventory accounts to eventually become cost of goods sold.

FIFO

An inventory valuation method which assumes that the first goods purchased or produced are also the first ones sold, also known as "First In, First Out."

Ending Inventory

The worth of products ready for purchase at the close of a financial period.