If Manufacturing Overhead Is Overapplied for the Period, a Method

question 16

Multiple Choice

If manufacturing overhead is overapplied for the period, a method to bring the balance of the manufacturing overhead account to zero would be:

• A) debit cost of goods sold, credit manufacturing overhead.
• B) debit work in process inventory, credit manufacturing overhead.
• C) debit manufacturing overhead, credit raw materials inventory.
• D) debit manufacturing overhead, credit cost of goods sold.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting.

R&D Costs

Expenses associated with the research and development of a company's goods or services, often considered an investment in a company's future.

Historical Cost Principle

An accounting principle that states all assets and liabilities should be recorded and reported at their original purchase cost.

Comparability

A financial accounting principle that allows the financial statements of multiple periods or companies to be comparable with each other.