In the preparation of departmental income statements, the preparer completes the following steps in the following order:
A) Identify indirect expenses; allocate direct expenses; allocate service department expenses.
B) Identify service department expenses; allocate direct expenses; allocate indirect expenses.
C) Identify direct expenses; allocate service department expenses; allocate indirect expenses.
D) Allocate all expenses.
E) Identify direct expenses; allocate indirect expenses; allocate service department expenses.

Question

Quizplus · Accepted Answer

The correct order is to first identify direct expenses, then allocate indirect expenses, and finally allocate service department expenses.

In the Preparation of Departmental Income Statements, the Preparer Completes