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

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Expenses

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Expenses

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

If overhead is underapplied, which of the following statements is FALSE?

Underapplied overhead indicates that not enough overhead was allocated to products.

Actual overhead costs incurred are less than the overhead applied to production.

The Manufacturing Overhead account will have a debit balance.

Cost of Goods Sold may need to be increased to adjust for underapplied overhead.

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of underapplied overhead. Underapplied overhead occurs when the actual overhead costs incurred are greater than the overhead applied to production. This means that the company did not allocate enough overhead to its products during the accounting period.

Step 2: Analyze the statements provided in the problem. The goal is to identify which statement is FALSE based on the definition and characteristics of underapplied overhead.

Step 3: Evaluate the first statement: 'Underapplied overhead indicates that not enough overhead was allocated to products.' This statement is TRUE because underapplied overhead means the applied overhead is less than the actual overhead incurred.

Step 4: Evaluate the second statement: 'Actual overhead costs incurred are less than the overhead applied to production.' This statement is FALSE because underapplied overhead occurs when actual overhead costs are greater than the applied overhead, not less.

Step 5: Evaluate the remaining statements: 'The Manufacturing Overhead account will have a debit balance' and 'Cost of Goods Sold may need to be increased to adjust for underapplied overhead.' Both of these statements are TRUE because underapplied overhead results in a debit balance in the Manufacturing Overhead account, and the Cost of Goods Sold may need to be adjusted upward to account for the underapplied amount.