Systematic allocation means spreading a cost over time or across units using a consistent and rational method. Depreciation and amortization are common examples of systematic allocation because the cost of an asset is recognized over its useful life. This approach helps match cost with the benefit received in each accounting period.
Suspense Account
A suspense account is a temporary account used to hold amounts when the correct accounting treatment or account head is not yet known. It...
Sunk Cost
A sunk cost is a cost that has already been incurred and cannot be recovered, regardless of future decisions. Since it cannot be changed,...
Substantive Testing
Substantive testing is an audit procedure used to verify the accuracy and completeness of financial statement balances and transactions. It may involve checking invoices,...
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