Smith Company Has the Following Selected Debit Balance Accounts at the End

question 75

Multiple Choice

Smith Company has the following selected debit balance accounts at the end of the current year: Work-in-Process, $25,000; Finished Goods, $12,500; Cost of Goods Sold, $37,500; and Factory Overhead, $6,000.The pro-rated amount charged to Cost of Goods Sold for factory overhead will be

• A) $25,000.
• B) $3,000.
• C) $37,500.
• D) $6,000.

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Definitions:

Net Profit

The financial gain achieved after subtracting all expenses, taxes, and costs from total revenue.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs, indicating the company's profitability.

Depreciation

The accounting process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear or obsolescence.

Inventory

A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold.