An Account Is Increased by a Debit and Has a Normal

question 48

Multiple Choice

An account is increased by a debit and has a normal balance of a debit. This account is:

• A)an expense account.
• B)a liability account.
• C)an asset account.
• D)both an expense account and an asset account.

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Definitions:

Underapplied Manufacturing Overhead

This occurs when the allocated manufacturing overhead costs are less than the actual overhead costs incurred, leading to a cost variance.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including both material and labor costs.

Overapplied Manufacturing Overhead

A situation where the estimated manufacturing overhead costs are more than the actual overhead costs incurred.

Underapplied Manufacturing Overhead

The amount by which the actual manufacturing overhead costs exceed the applied manufacturing overhead costs for a period.