Back to Questions
SSC Financial and Cost Accounting P-1 QUESTION #9663
Question 1
An allocation basis for 'Building Rent' in Departmental Accounts would most appropriately be:
  • Sales revenue ratio
  • Number of employees
  • Area occupied by each department✔️
  • Purchase ratio
Correct Answer Explanation
Building rent is a space-related expense and should logically be allocated based on the floor area each department occupies. This is the 'obvious just ratio' basis described in the FIN611 text for premises-related costs.