How Does a Company Eliminate Any Immaterial Balance in the Manufacturing

question 73

Multiple Choice

How does a company eliminate any immaterial balance in the Manufacturing Overhead account at the end of the year?

• A)The amount is moved to Cost of Goods Sold.
• B)The amount remains in the Manufacturing Overhead Expense account and appears on the Income Statement.
• C)The amount is closed to Retained Earnings.
• D)The amount is moved to Finished Goods Inventory.

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Definitions:

Average Precipitation

The mean amount of rain, snow, sleet, or hail that falls in a region over a set period, usually measured in millimeters or inches.

Average Temperature

The mean value of temperature taken over a specified period of time which indicates the overall climate pattern of a region.

Leeward Side

The side of a mountain or hill sheltered from the wind; typically receives less precipitation.