Muldoon Advertising Has an Opening Balance in Its Supplies Account

question 136

Multiple Choice

Muldoon Advertising has an opening balance in its supplies account of $2,400 and purchases $3,000 of supplies during the year.A year-end physical count shows $2,800 in supplies inventory.Which is the appropriate journal entry at year end?

• A)Dr Supplies Expense $2,600
• Cr Supplies $2,600
• B)Dr Supplies Expense $2,800
• Cr Supplies $2,800
• C)Dr Supplies $2,600
• Cr Supplies Expense $2,600
• D)Dr Supplies $3,000
• Cr Cash $3,000

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Definitions:

Machine-Hours

A measure of production time that quantifies the number of hours a machine is in operation, used for allocating manufacturing costs related to machinery use.

Manufacturing Departments

Divisions within a manufacturing facility, each specialized in a particular aspect of the production process.

Overhead Rate

The rate at which indirect manufacturing costs are allocated to products or services.

Activity-Based Costing

A duplicate term; an accounting method that identifies and assigns costs to overhead activities and then links those costs to products, providing detailed information on where a company is incurring costs and why.