Criteria for Selecting Allocation Bases for Service Department Allocations Should

question 114

Multiple Choice

Criteria for selecting allocation bases for service department allocations should not include:

• A) direct,traceable benefits from the service.
• B) the extent of facilities provided.
• C) the ease of making an allocation.
• D) sales dollars generated during the perioD.
• Revenues are never a good base for allocating service costs.

---

Definitions:

Liquid

Describes an asset's ability to be quickly converted into cash without significant loss in value.

Maturity Date

The maturity date is the specified date on a financial instrument at which the principal (or final payment) is due to be paid to the holder.

Retained Earnings

The portion of a company's net income that is not distributed to shareholders as dividends but is retained by the company to reinvest in its core business or to pay debt.