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

In recording applied overhead costs, the factory overhead account is:

Credited

Debited

Closed to Cost of Goods Sold

Not affected

Previous problemNext problem

Verified step by step guidance

Understand the concept of applied overhead: Applied overhead refers to the estimated overhead costs allocated to production based on a predetermined rate, often calculated using direct labor hours, machine hours, or another activity base.

Recognize the role of the factory overhead account: The factory overhead account is used to track actual overhead costs incurred and applied overhead costs during production. It helps ensure that overhead costs are properly allocated to products or jobs.

Determine the accounting treatment for applied overhead: When overhead is applied to production, the factory overhead account is credited to reduce the balance of overhead costs. This reflects the allocation of overhead to specific jobs or products.

Understand the double-entry system: In the double-entry accounting system, the credit to the factory overhead account is accompanied by a debit to the Work-in-Process (WIP) inventory account, indicating that the overhead costs are now part of the production costs.

Review the closing process: At the end of the accounting period, any remaining balance in the factory overhead account (overapplied or underapplied overhead) is typically closed to Cost of Goods Sold or allocated to other accounts, depending on company policy.