If Manufacturing Overhead Has a Negative Balance at the End

question 64

Multiple Choice

If Manufacturing Overhead has a negative balance at the end of the period then

• A)overhead has been underapplied.
• B)the overhead assigned to Work in Process Inventory is less than the overhead incurred.
• C)overhead has been overapplied.
• D)management must take corrective action.

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Definitions:

Trial Balance

A financial statement that lists the balances of all ledgers accounts to ensure that debits equal credits.

Transaction Recorded

The act of documenting a business transaction in the company's accounting records.

Debit

A debit is an accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet, or in the context of personal banking, a withdrawal from an account.

Credit

An accounting entry reflecting an increase in assets or decrease in liabilities on a company's balance sheet or an entry on the right side of an account.