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

Which of the following best describes the journal entry to apply factory overhead to production?

Debit Work in Process; Credit Factory Overhead

Debit Factory Overhead; Credit Raw Materials

Debit Factory Overhead; Credit Work in Process

Debit Finished Goods; Credit Factory Overhead

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Verified step by step guidance

Understand the concept of factory overhead application: Factory overhead refers to indirect costs incurred during production, such as utilities, depreciation, and maintenance. These costs are applied to production to allocate them to the Work in Process (WIP) account.

Recognize the role of the Work in Process account: The WIP account tracks the costs of partially completed goods during production. When factory overhead is applied, it increases the WIP account to reflect the indirect costs allocated to production.

Understand the Factory Overhead account: The Factory Overhead account is used to accumulate indirect costs. When these costs are applied to production, the Factory Overhead account is credited to reduce its balance, as the costs are transferred to the WIP account.

Determine the correct journal entry: To apply factory overhead to production, you debit the Work in Process account (to increase it) and credit the Factory Overhead account (to decrease it). This reflects the allocation of indirect costs to production.

Review the options provided: The correct journal entry is 'Debit Work in Process; Credit Factory Overhead,' as this accurately applies factory overhead to production.