Which of the Following Accounts Has a Normal Credit Balance

question 6

Multiple Choice

Which of the following accounts has a normal credit balance?

• A) Purchases
• B) Sales Returns and Allowances
• C) Freight-In
• D) Purchase Discounts

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Definitions:

Idle Time

Time periods when resources such as personnel or machines are not actively engaged in production, often leading to inefficiency and increased costs.

Direct Labour Expense

The total cost of all the labour directly involved in the production of goods or services.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor costs.

Conversion Costs

The costs incurred to convert raw materials into finished goods, including direct labor and manufacturing overhead expenses.