Which of the following statements is true of costing systems?
A) Single-indirect cost pool systems always result in overcosting of products.
B) Single-indirect cost pool systems classify some direct costs as indirect costs.
C) ABC systems always result in overcosting of products.
D) ABC systems classify some indirect costs as direct costs helping to improve processes
Question 2
A government defeased in substance 5,000,000 of outstanding general obligation bonds several years prior to their maturity. The government paid 6,000,000 into an irrevocable trust to accomplish the defeasance in substance.
The payment included 3,000,000 of proceeds from new bonds issued that were to provide resources for the bond defeasance. The other 3,000,000 had been accumulated over previous years from taxes and interest earnings in the Debt Service Fund. The government should report the payment into the irrevocable trust from its Debt Service Fund as
A. Other financing uses of 6,000,000.
B. Expenditures of 6,000,000.
C. Other financing uses of 3,000,000 and expenditures of 3,000,000.
D. Other financing uses of 5,000,000 and expenditures of 1,000,000.
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