Junction Plants Had the Following Transactions During August

question 26

Multiple Choice

Junction Plants had the following transactions during August.Which transaction represents an expense for August under the accrual basis of accounting?

• A)Purchased a computer for $3000 cash
• B)Paid $3300 in settlement of a loan obtained three months earlier
• C)Paid a service station $500 for repair work performed on its delivery truck in June
• D)Purchased $30 of petrol on credit for the delivery truck.The account will be paid during September

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Definitions:

Work in Process

An inventory category that refers to partially completed goods awaiting completion and sale, standing between raw material and finished goods inventory.

Job Cost Sheets

Documents used to record and track the expenses associated with each specific job in a manufacturing process, including labor, materials, and overhead costs.

Control Account

An account used to summarize transactions recorded in subsidiary ledgers for a comprehensive total in the general ledger.

Predetermined Overhead Rate

A calculated rate used to estimate the manufacturing overhead cost per unit of production, based on expected costs and activity levels.