The Logical Explanation for an Entry That Includes a Debit

question 169

Multiple Choice

The logical explanation for an entry that includes a debit to Manufacturing Overhead control and a credit to Prepaid Insurance is

• A)the insurance company sent the company a refund of its policy premium.
• B)overhead for insurance was applied to production.
• C)insurance for production equipment expired.
• D)insurance was paid on production equipment.

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Definitions:

Total

The aggregate amount or sum of individual items or elements in a set or group.

Closing Journal Entries

The entries made at the end of an accounting period to transfer the balances in temporary accounts to permanent accounts and prepare the company's books for the next period.

Adjusting Journal Entries

Entries made in the accounting records at the end of an accounting period to allocate income and expenditure to the correct period.

Journal Entries

Records of financial transactions in the accounting system, typically involving a debit to one account and a corresponding credit to another account.