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

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Multiple Choice

In accounting for factory overhead, the Factory Overhead account is ______ for actual overhead costs incurred during the period.

debited

closed

credited

reconciled

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Verified step by step guidance

Understand the concept of factory overhead: Factory overhead refers to the indirect costs incurred during the production process, such as utilities, depreciation, and maintenance of factory equipment.

Recognize the nature of the Factory Overhead account: In accounting, the Factory Overhead account is used to track these indirect costs. It is a temporary account that accumulates overhead costs during the period.

Determine the treatment of actual overhead costs: When actual overhead costs are incurred, they are recorded as debits in the Factory Overhead account. This is because expenses increase on the debit side in accounting.

Learn about the closing process: At the end of the accounting period, the Factory Overhead account is closed by transferring its balance to the Cost of Goods Manufactured or Work-in-Process accounts, depending on the company's accounting practices.

Understand reconciliation: Reconciliation involves comparing the actual overhead costs with the applied overhead costs to ensure accuracy. Any difference is adjusted through over-applied or under-applied overhead entries.