Applied Overhead Exceeds Actual Overhead When the

question 74

Multiple Choice

Applied overhead exceeds actual overhead when the

• A) Overhead account has a credit balance.
• B) journal entry to account for the difference involves a debit to Cost of Goods Sold.
• C) Overhead account has a debit balance.
• D) company has overspent in the overhead cost area.

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Definitions:

Passive Shareholder

An investor who holds a stake in a company but does not take part in day-to-day management or operational decisions.

Authorized Shares

Shares that a corporation is empowered to issue by its articles of incorporation.

Preference Shares

A class of stock that provides shareholders with priority over common shareholders in terms of dividends and assets in the event of liquidation.

Issued Shares

A corporation’s shares that a corporation has sold to its shareholders. Includes shares repurchased by the corporation and retained as treasury shares, but not shares canceled or returned to unissued status.