The Journal Entry to Record a Payment Made in January

question 85

Multiple Choice

The journal entry to record a payment made in January for rent for the months of February and March would include

• A) a debit to Sue Snow,Capital,and a credit to Cash.
• B) a debit to Rent Expense and a credit to Cash.
• C) a debit to Prepaid Rent and a credit to Cash.
• D) a debit to Sue Snow,Drawing and a credit to Rent Expense.

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Definitions:

Variable Costing

A managerial accounting method that only considers variable costs as product costs, with fixed overhead costs treated as period expenses.

Variable Costing

A costing method that includes only variable manufacturing costs — direct materials, direct labor, and variable manufacturing overhead — in the cost of a product.

Unit Product Cost

The total cost incurred to produce, package, and place a product ready for sale, divided by the number of units produced.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed overhead—in the cost of a product.