Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes the journal entry to record factory overhead applied to Work in Process?

Debit Work in Process; Credit Factory Overhead

Debit Factory Overhead; Credit Raw Materials

Debit Work in Process; Credit Raw Materials

Debit Factory Overhead; Credit Work in Process

Previous problemNext problem

Verified step by step guidance

Understand the concept of factory overhead: Factory overhead refers to indirect costs incurred during production, such as utilities, depreciation, and maintenance of factory equipment. These costs are applied to Work in Process to allocate them to the products being manufactured.

Review the purpose of Work in Process: Work in Process (WIP) represents the costs of partially completed goods. When factory overhead is applied, it increases the WIP account to reflect the indirect costs associated with production.

Analyze the journal entry structure: A journal entry must have a debit and a credit. Debiting Work in Process increases its balance, while crediting Factory Overhead reduces its balance, as the overhead is being applied to production.

Match the correct accounts: To record factory overhead applied to Work in Process, the correct accounts are Debit Work in Process (to increase production costs) and Credit Factory Overhead (to reduce the overhead account).

Verify the correct answer: Based on the explanation, the correct journal entry is 'Debit Work in Process; Credit Factory Overhead,' as this reflects the application of indirect costs to production.