In Preparing Closing Entries

question 148

Multiple Choice

In preparing closing entries

• A) each revenue account will be credited.
• B) each expense account will be credited.
• C) the retained earnings account will be debited if there is net income for the period.
• D) the dividends account will be debited.

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Definitions:

Manufacturing Overhead

Indirect factory-related costs that are incurred when producing a product, such as utilities, maintenance, and quality control.

Indirect Materials

Materials used in the production process that cannot be directly linked to a specific product, such as lubricants and cleaning supplies used in a factory.

FIFO Method

An inventory valuation method where the first items placed in inventory are the first ones sold or used out; FIFO stands for “First In, First Out”.

Work In Process

This term is often used interchangeably with Work In Progress, denoting goods that are partially completed in the manufacturing process.