An Adjusting Entry Can Include A

question 154

Multiple Choice

An adjusting entry can include a:

• A)debit to an asset and a credit to a liability.
• B)debit to a revenue and a credit to an asset.
• C)debit to a liability and a credit to a revenue.
• D)debit to an expense and a credit to a revenue.

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Definitions:

Work in Process

Goods in various stages of completion throughout the factory, not yet ready for sale, comprising direct labor, material, and manufacturing overhead.

Overapplied Manufacturing Overhead

This occurs when the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Underapplied Manufacturing Overhead

This occurs when the allocated cost for manufacturing overhead is less than the actual overhead costs incurred, indicating a shortfall in cost coverage.

Work in Process

Inventory that includes goods that are in production but not yet complete.