Service department charges are similar to the expenses of a profit center that purchased services from a source outside the company.

Question

Quizplus · Accepted Answer

Service department charges are essentially the costs incurred by the service department for providing services to other departments within the company. These charges are treated as expenses for the department that receives the services, similar to expenses incurred by a profit center for purchasing services from an external source.

Service Department Charges Are Similar to the Expenses of a Profit