If Manufacturing Overhead Has Been Underapplied During the Year the Adjustment

question 57

Multiple Choice

If manufacturing overhead has been underapplied during the year the adjustment at the end of the year will show a(n)

• A)increase to Manufacturing Overhead.
• B)decrease to Cost of Goods Sold.
• C)increase to Work in Process Inventory.
• D)increase to Cost of Goods Sold.

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Definitions:

Debit

An accounting entry that increases an asset or expense account or decreases a liability or equity account.

Credit

In finance, it refers to the borrowing capacity of an individual or company, or the entry on the right side of a financial account, indicating an increase in liability or decrease in asset.

Unadjusted Trial Balance

A report listing all the balances in each account in the ledger before any adjusting entries are made, used to check the equality of debits and credits.

Errors

Mistakes or inaccuracies found in financial statements or transactions.