If It Is a Material Amount, Overapplied or Underapplied Overhead

question 108

Multiple Choice

If it is a material amount, overapplied or underapplied overhead should be disposed of by allocating it to:

• A) Cost of goods sold and finished goods inventory.
• B) Finished goods inventory and goods in process inventory.
• C) Goods in process inventory, finished goods inventory, and cost of goods sold.
• D) Goods in process inventory.
• E) Raw materials inventory, goods in process inventory, and finished goods inventory.

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Definitions:

Corporation by Estoppel

A legal doctrine preventing one from denying the corporate status of an entity to escape liability after having treated it as a corporation.

Novation Clause

A legal provision that allows an original contract to be replaced with a new contract, wherein a new party takes on the obligations of one of the original parties.

Office Support Staff

Employees who perform a variety of administrative and clerical tasks to support the operations of an office.

Organizational Meeting

The initial meeting held by the incorporators or directors of a new corporation to complete the formation of the corporation and to establish its internal affairs.