If Underapplied Overhead Is Considered to Beimmaterial, It Is Closed

question 14

Multiple Choice

If underapplied overhead is considered to beimmaterial, it is closed to which of the following accounts?

• A) yes yes yes
• B) no yes yes
• C) yes no no
• D) no no yes

---

Definitions:

Total Operating Capital

The sum of all capital employed in a company’s daily operations, including inventory, accounts receivable, and fixed assets.

Tax Liability

The total amount of tax that individuals or businesses are legally obligated to pay to tax authorities.

Income from Operation

A company's earnings before interest and taxes (EBIT), representing the profit from ongoing, core business activities.

Dividends

Payments made by a corporation to its shareholders, typically from profits.