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 account is debited in the journal entry to record indirect labor costs used in production?

Wages Payable

Factory Overhead

Direct Labor Expense

Work in Process Inventory

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Verified step by step guidance

Understand the concept of indirect labor costs: Indirect labor refers to wages paid to employees who are not directly involved in the production process but support it, such as maintenance workers or supervisors.

Review the role of Factory Overhead: Factory Overhead is an account used to accumulate all indirect costs related to production, including indirect labor, indirect materials, and other factory-related expenses.

Determine the journal entry structure: In a journal entry, the account that incurs the cost (Factory Overhead in this case) is debited, while the account that represents the liability or payment (e.g., Wages Payable) is credited.

Apply the matching principle: Indirect labor costs are part of the production process, so they are allocated to Factory Overhead to ensure proper matching of costs with the production activity.

Conclude the journal entry: To record indirect labor costs used in production, debit the Factory Overhead account and credit the Wages Payable account, reflecting the accumulation of costs and the liability for wages.