Asked by Rehana Shammi on Jun 01, 2024
Verified
Which of the following statements is false as it relates to direct and indirect expenses?
A) Building expense is an indirect expense.
B) Indirect expenses cannot be assigned to different departments based on an allocation such as square feet.
C) If an expense is traceable to a particular department, it is a direct expense.
D) Advertising expense can be both a direct and an indirect expense.
Indirect Expenses
Costs that are not directly tied to specific cost objects like products, projects, or departments.
Direct Expenses
Costs that can be directly traced to the production of specific goods or services, such as raw materials and labor.
Building Expense
Costs incurred for the operation, maintenance, and repair of building properties.
- Acquire knowledge on differentiating direct costs from indirect costs.
- Distinguish between direct and indirect expenses as per departmental accounting principles.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
B
Explanation :
Indirect expenses can indeed be allocated to different departments based on various allocation bases, such as square footage for building expenses. This allows for a more accurate representation of the costs associated with each department.
Learning Objectives
- Acquire knowledge on differentiating direct costs from indirect costs.
- Distinguish between direct and indirect expenses as per departmental accounting principles.