Which of the Following Is Not a True Statement Regarding

question 87

Multiple Choice

Which of the following is not a true statement regarding the pooling of indirect costs?

• A) Costs that have been pooled for one purpose may require disaggregation for a different purpose.
• B) Pooling costs that have different cost drivers may result in unreliable cost allocation.
• C) A single cost pool will have more than one cost driver for different cost objects.
• D) Pooled costs may require disaggregation when allocating costs for different purposes.

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Definitions:

Debt Capital

Funds borrowed by businesses to finance their operations or growth, which must be repaid to lenders with interest.

Equity Capital

Funds that are raised by a company in exchange for a share of ownership in the company.

Factoring

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

Trade Credit

An agreement where a buyer is allowed to purchase goods or services and pay the supplier at a later scheduled date.