Which of the Following Accounts Has a Normal Credit Balance

question 90

Multiple Choice

Which of the following accounts has a normal credit balance?

• A)Purchases
• B)Sales Returns and Allowances
• C)Freight-In
• D)Purchase Discounts

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing, including utilities, maintenance, and management salaries, not directly tied to the production of goods.

Applied Overhead

The portion of overhead allocated to specific jobs or production units based on a predetermined rate, contributing to the total cost of production.

Actual Overhead

The real costs associated with manufacturing overhead that a company incurs, as opposed to budgeted or estimated overhead costs.

Job Order Production

A production system where products are manufactured individually or in small batches, tailored to specific orders or job requirements.