Under the Step-Down Method, Once a Service Department's Costs Have

question 40

True/False

Under the step-down method, once a service department's costs have been allocated to other departments, no costs should be reallocated back to the service department.

---

Definitions:

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the corporation's assets and earnings.

Stock Dividend

A dividend payment made in the form of additional shares of the company's stock rather than cash.

Par Value

The nominal or face value of a bond, stock, or coupon as indicated on a certificate or instrument.

Common Stock Dividends Distributable

A liability recognized on a company's balance sheet for dividends declared on common stock that have not yet been paid to shareholders.