Use This Information to Answer the Following Question

question 8

Multiple Choice

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:
If on December 31,2014,the insurance still unexpired amounted to $20,the adjusting entry would contain a

• A)debit to Prepaid Insurance for $80.
• B)credit to Prepaid Insurance for $80
• C)debit to Insurance Expense for $20.
• D)credit to Prepaid Insurance for $20.

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process or providing services.

Manufacturing Overhead

All indirect costs associated with the production process, such as maintenance, utilities, and quality control costs.

Cost of Goods Sold

The direct costs attributed to the production of the goods sold by a company, including material and labor costs.

Underapplied Overhead

A condition where the applied manufacturing overhead is less than the actual manufacturing overhead.