Using the Department Allocation Method,a Company Establishes a Separate Overhead

question 55

True/False

Using the department allocation method,a company establishes a separate overhead allocation rate for each department.

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Definitions:

Adjusting Entry

A journal entry made in the accounting records at the end of an accounting period to allocate income and expenditure to the appropriate period.

Prepaid Rent

An expense recorded before it is actually paid, representing rent payments made in advance of the period to which they relate.

Adjusting Entries

Final journal recordings at the close of an accounting spell to assign revenues and expenditures to the factual period of occurrence.

Supplies

Materials and goods used in the operation of a business, often consumable and regularly replaced.