The Entry to Close Out a Significant Amount of Overapplied

question 96

Multiple Choice

The entry to close out a significant amount of overapplied manufacturing overhead would affect all of the below except:

• A)decrease the cost of goods manufactured
• B)decrease finished goods inventory
• C)increase cost of goods sold
• D)increase net income

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Definitions:

Enforcement

The act of compelling compliance with a law, rule, agreement, or order through the application of penalties for violations.

Conforming Goods

Products that meet the specifications and requirements set forth in a contract of sale.

Obligated

Being legally or morally bound to do something.

Perfect Tender Rule

A legal principle requiring sellers to deliver goods that exactly meet the terms and specifications of the contract.