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:

Common Law

A system of law based on precedent and customs rather than statutory laws.

Gap-Filling Rules

Provisions in law that allow courts or parties to fill in missing terms in a contract.

Sale Of Goods

The transfer of ownership to tangible personal property in exchange for money, other goods, or the performance of service.

Enforceable Contract

A legal agreement between parties that is valid under the law and can be upheld in a court of law if breached.