Identify the Journal Entry Required to Correctly Record Each of the Following

question 64

Short Answer

Identify the journal entry required to correctly record each of the following transactions.
-Income tax for the year estimated.
A. DR Income tax expense $\quad$ CR Retained profits

B. DR Taxes payable $\quad$ CR Income tax expense

C. DR Income tax expense $\quad$ CR Taxes payable

D. DR Income tax expense $\quad$ CR Taxes payable

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Definitions:

Spending Variance

The difference between the budgeted or planned amount of expense and the actual amount spent.

Variable Overhead Spending Variance

The difference between the actual costs incurred for variable overheads and the expected costs of variable overheads based on standard cost.

Fixed Overhead Spending Variance

This metric measures the difference between the actual fixed overhead costs incurred and the budgeted (or standard) fixed overhead costs.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost for the actual level of activity.