The terms "cost tracing" and "cost allocation" may be used interchangeably because they mean the same thing.

Question

Quizplus · Accepted Answer

Cost tracing refers to the process of directly identifying and assigning costs to a specific cost object, while cost allocation involves assigning indirect costs to cost objects using an allocation method. Although related, the two terms refer to distinct accounting concepts and cannot be used interchangeably.

The Terms "Cost Tracing" and "Cost Allocation" May Be Used