For Each of the Following Transactions of Chen Inc

question 43

Essay

For each of the following transactions of Chen Inc., identify the account to be debited and the account to be credited.
1. Purchased 18-month insurance policy for cash.
2. Paid weekly payroll.
3. Purchased supplies on account.
4. Received utility bill to be paid at later date.

---

Definitions:

Direct Labor-hours

The sum of hours spent by staff actively involved in the process of manufacturing.

Activity Measure

A metric or index used to gauge the extent or level of activity undertaken in a particular process or operation.

Activity-based Costing

A method of allocating overhead and indirect costs to products or services based on the activities that generate those costs.

Overhead Costs

General business expenses that are not directly attributable to a specific product or service but are necessary for the business to operate.