Principles of Accounting

Principles of Accounting

1. Describe the process of allocation of costs in this organization, do you agree with the approach? Why or Why not?

The purpose of this cost allocation plan is to summarize, in writing, the methods and procedures that this organization will use to allocate costs to various programs, grants, contracts and agreements. OMB Circular A-122, (David, 2008) “Cost Principles for Non-Profit Organizations,” establishes the principles for determining costs of grants, contracts and other agreements with the Federal Government. XYZ Organization's Cost Allocation Plan is based on the Direct Allocation method described in OMB Circular A-122.

The Direct Allocation ...