If the Overhead Control Account Has a Credit Balance at the End

question 68

Multiple Choice

If the overhead control account has a credit balance at the end of the period,

• A) overhead is overapplied and the difference should be credited to the proper accounts.
• B) overhead is overapplied and the difference should be debited to the proper accounts.
• C) overhead is underapplied and the difference should be debited to the proper accounts.
• D) overhead is underapplied and the difference should be credited to the proper accounts.

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Definitions:

Surplus Cash

Excess funds that a company retains over its necessary working capital and capital expenditure requirements, often available for investment or distribution.

Dividends

A portion of a company's earnings distributed to shareholders, often in the form of cash or additional stock.

Internal Revenue Code

The comprehensive set of tax laws in the United States, governed by the Internal Revenue Service (IRS), that dictates federal tax obligations.

Federal Income Taxes

Taxes imposed by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.