Accounting for IGCSE & O level - Final Statements (Section 10 - No. 16)
Which of the following is true about the allocation of shared expenses in departmental accounting?
It must be done equally among all departments.
It is often based on sales, floor space, or number of employees.
It is essential for determining accurate departmental profitability.
It is not important for decision-making purposes.
Explication
Shared expenses should be allocated in a fair and reasonable way.