When selecting a method of cost apportionment an accountant should choose:

Question

Quizplus · Accepted Answer

The most appropriate method of cost apportionment is the one that best reflects the economic use of the asset. This method considers the expected benefit that assets provide over their useful life, which helps in determining the appropriate amount to be charged as an expense in each accounting period. This approach facilitates the accurate tracking of asset usage and aligns costs with benefits received. The method that produces the best profit for the firm (option B) may not necessarily provide an accurate representation of costs and benefits, and using the method stipulated by the taxation department (option C) may not be the most suitable approach for decision-making purposes. Option A only considers the physical life of the asset and may not provide an accurate representation of usage, hence it is not the best option.

When Selecting a Method of Cost Apportionment an Accountant Should