Which One of the Following Is True About Under- or Over-Applied

question 47

Multiple Choice

Which one of the following is true about under- or over-applied overhead at the end of a particular year?

• A)It requires a correction to the cost of all jobs completed.
• B)It is combined with cost of goods sold.
• C)The company can offset it during future months.
• D)Its existence implies the company has made an error.

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Definitions:

Subsidiary Ledger

A subsidiary ledger is a group of similar accounts whose totals summarize into a single amount shown in the general ledger, aiding detailed financial analysis and tracking.

Fraud Triangle

The fraud triangle is a model that explains the factors that lead individuals to commit fraud: pressure, opportunity, and rationalization.

Financial Pressure

The stress or strain on a company's cash flow or finances, which can impact its operational capabilities and financial stability.

Opportunity

A situation or condition favorable for the attainment of a goal.