Determine the Account and Amount to Be Debited and the Account

question 75

Essay

Determine the account and amount to be debited and the account and amount to be credited for the following adjustment.On December 31,2016,the Notes Payable account had a balance of $6,000.This represented a 3-month,9 percent note issued on December 1,2016.

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Definitions:

Average Total Costs

The total cost of production divided by the quantity of output produced, representing the cost per unit of output.

Total Variable Costs

The total of all costs that vary with the level of output, including expenses such as raw materials, labor, and utilities that increase as production expands.

Average Variable Cost

A firm’s total variable cost divided by output (the quantity of product produced).

Economies of Scale

The cost advantages that enterprises obtain due to the size, output, or scale of their operation, with costs per unit of output generally decreasing with increasing scale.