The Journal Entry to Record the Allocation of Any Underapplied

question 126

Multiple Choice

The journal entry to record the allocation of any underapplied or overapplied manufacturing overhead for November would include the following:

• A)debit to Work in Process of $16,240
• B)credit to Work in Process of $16,240
• C)debit to Work in Process of $180
• D)credit to Work in Process of $180

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Definitions:

Net Credit Sales

The total amount of sales made on credit minus returns and allowances, representing actual sales revenue.

Matching Concept

An accounting principle that dictates expenses should be matched with the revenues they help to generate within the same accounting period.

Clearinghouse Collection Fee

A charge levied by a clearinghouse for handling the processing and settlement of transactions between financial institutions.

Credit Card Sales

Transactions in which customers use credit cards to pay for goods or services, creating a receivable for the seller until payment is processed by the card issuer.