Which of the following expenses is not allocated on time basis
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There are certain expenses which cannot be apportioned or allocated among the different departments on a suitable basis, the same should be transferred to General Profit and Loss Account (e.g., Interest on Capital, Debenture Interest, Loss on sale of assets, Interest on loan, General Manager's Salary etc.).
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Complete question:
Which of the following expenses is not allocated on time basis?
(a) Rent
(b) Salaries
(c) Discounts
Answer:
(c) Discounts are not allocated on a time basis.
Explanation for the answer:
- Discounts are the expenses which are apportioned based on the sales value of the individual department.
- It refers to the reduced prices or something being sold at a price lower than that item is actually sold for.
- These expenses are not allocated on time basis.
- Hence, the correct answer among all the options is option (c) Discounts.
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