Harry and Wanda Were Married in Texas, a Community Property

question 67

Multiple Choice

Harry and Wanda were married in Texas, a community property state, but moved to Virginia, a common law state. The calculation of their income on a joint return:

• A)Will increase as a result of changing their state of residence.
• B)Will decrease as a result of changing their state of residence.
• C)Will not change as a result of changing their state of residence.
• D)Will not be permitted.
• E)None of these.

---

Definitions:

Overapplied Manufacturing Overhead

A situation where the amount of manufacturing overhead allocated to products is more than the actual overhead incurred.

Work in Process

Inventory that includes all materials, labor, and overhead costs incurred for products that are in the production process but not yet completed.

Debit Balance

An amount that reflects a surplus of debits over credits in an account, often indicating assets or expenses.

Raw Materials

Basic substances in their natural, modified, or semi-processed states, used as inputs in manufacturing or production.