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

question 71

Multiple Choice

If the overhead control account has a debit 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:

Purchases Discount

A reduction in the price paid for goods and services if payment is made within a certain period, often used to encourage early payment.

Cash Discounts

A reduction in the invoice amount by a seller to encourage early payment from the buyer, usually within a specified time frame.

Periodic Inventory

An inventory system where stock levels are checked and updated at regular, specified intervals.

Computerized Accounting Systems

Software applications designed to manage and automate financial transactions and records for businesses.