Which of the Following Cost Classifications Do Not Apply to Service

question 4

Multiple Choice

Which of the following cost classifications do not apply to service organisations?
i. Direct/indirect
ii. Fixed/variable
iii. Production/non-production
iv. Controllable/uncontrollable

• A) i and ii
• B) ii
• C) iii
• D) iii and iv

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Definitions:

Voucher System

A control mechanism in accounting to approve and document all disbursements of cash for business transactions.

Cash Payments

Transactions involving the outflow of cash to settle debts, purchase goods, or cover expenses.

Canceled Checks

Checks that have been paid by the bank, marked as canceled, and are no longer negotiable.

Payee

The entity in a financial deal that gets the payment.