The Journal Entry to Record an Addition to an Office

question 21

Multiple Choice

The journal entry to record an addition to an office building would include:

• A) credit to depreciation expense.
• B) credit to accumulated depreciation.
• C) debit to repair expense.
• D) debit to office building.

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Definitions:

Controllable Variance

The difference between expected and actual costs that managers have the power to influence directly.

Direct Labor Rate Variance

This refers to the difference between the actual cost of labor and the expected (or standard) cost of labor used in producing goods.

Direct Labor

The cost of wages for workers who are directly involved in the production of goods or the delivery of services.

Variable Overhead Efficiency Variance

The difference between the standard cost of variable overheads allocated for actual production and the actual variable overheads incurred, used to assess efficiency in controlling variable overhead costs.