At the End of the Year,Martin Company Has a Preliminary

question 74

Multiple Choice

At the end of the year,Martin Company has a preliminary credit balance in the Manufacturing overhead account of $95.Which of the following is the year-end adjusting entry needed to clear the balance to zero?

• A) Debit Cost of sales $95, credit Finished goods inventory $95
• B) Debit Cost of sales $95, credit Manufacturing overhead $95
• C) Debit Manufacturing overhead $95, credit Finished goods inventory $95
• D) Debit Manufacturing overhead $95, credit Cost of sales $95

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Definitions:

Sales Budget

A detailed forecast of a company's sales, outlining expected sales volume and revenues for a specific period.

Credit

Credit is a financial term describing the ability of a buyer to receive goods or services before payment, based on the trust that payment will be made in the future.

Collected

The process of receiving payment for goods or services provided, often referring to the actual receipt of cash.

Minimum Cash Balance

The lowest amount of cash a business determines it needs on hand to meet its operational requirements.