Accounting 202 - Chapter 3.4

12 Questions | By Jc173 | Last updated: Mar 21, 2022 | Total Attempts: 418

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In today’s class we covered how to correct misallocations of overhead cost and journal entries in a manufacturing account. The test below is designed to test how well you understood out previous class and if you can make correct journal entries. Give it a try and all the best of luck!

Questions and Answers

1.

If manufacturing overhead has been underallocated during the period, and most of the jobs produced have been sold, then:
- A.
  
  Cost of goods sold should be decreased
- B.
  
  Cost of goods sold should be increased
- C.
  
  Finished goods inventory should be increased
- D.
  
  Work in process inventory should be decreased
2.

Determining how much manufacturing overhead is overallocated or underallocated is done:
- A.
  
  Before the period starts
- B.
  
  During the period
- C.
  
  At the end of the period
- D.
  
  At any time
3.

Under what circumstance should the amount of overallocation or underallocation be reflected as an adjustment to cost of goods sold?
- A.
  
  In all circumstances
- B.
  
  If most of the inventory produced during the period has not been sold
- C.
  
  Under no circumstance
- D.
  
  If most of the inventory produced during the period has been sold
4.

Cost of goods sold is debited and finished goods inventory is credited for
- A.
  
  Purchase of goods on account
- B.
  
  Transfer of goods to the finished goods storeroom
- C.
  
  The sale of goods to a customer
- D.
  
  Transfer of materials into work in process inventory
5.

Finished goods inventory is debited and work in process inventory is credited for:
- A.
  
  Purchase of goods on account
- B.
  
  Transfer of goods to the finished goods storeroom
- C.
  
  Transfer goods out of the factory
- D.
  
  Transfer of material to work in process inventory
6.

Raw materials inventory is credited and work in process inventory is debited when:
- A.
  
  Material is transferred to the factory
- B.
  
  We ship goods to the customer
- C.
  
  We transfer goods to the storeroom
- D.
  
  We purchase goods on account
7.

The cost of direct labor used in production is recorded as a
- A.
  
  Debit to manufacturing overhead credit to wages expense
- B.
  
  Debit to work in process inventory credit to wages payable
- C.
  
  Debit to wages expense credit to manufacturing overhead
- D.
  
  Debit to wages payable credit to work in process inventory
8.

The cost of direct materials used in production is recorded as a
- A.
  
  Debit to manufacturing overhead credit to direct materials expense.
- B.
  
  Debit to work in process inventory credit to raw materials inventory.
- C.
  
  Debit to raw materials inventory credit to work in process inventory.
- D.
  
  Debit to direct materials expense credit to manufacturing overhead.
9.

The journal entry needed to record the receipt of a factory utility bill would include a:
- A.
  
  Credit to manufacturing overhead
- B.
  
  Debit to manufacturing overhead
- C.
  
  Debit to accounts payable
- D.
  
  Debit to utilities payable
10.

The journal entry needed to record depreciation on the factory equipment would include a:
- A.
  
  Debit to manufacturing overhead credit to accumulated depreciation.
- B.
  
  Debit to work in process inventory credit to accumulated depreciation.
- C.
  
  Debit to depreciation expense credit to accumulated depreciation.
- D.
  
  Debit to accumulated depreciation credit to manufacturing overhead.
11.

The journal entry needed to allocate manufacturing overhead to specific jobs would include a:
- A.
  
  Credit to manufacturing overhead
- B.
  
  Debit to manufacturing overhead
- C.
  
  Debit to cost of goods sold
- D.
  
  Credit to work in process inventory
12.

The journal entry needed to record the receipt of a bill from the company's marketing agency would include a:
- A.
  
  Debit to manufacturing overhead
- B.
  
  Debit to marketing expense
- C.
  
  Debit to work in process inventory
- D.
  
  Credit to work in process inventory