If a company used two overhead accounts (actual overhead and applied overhead),the one that would receive the most debits would be
A)actual overhead.
B)applied overhead.
C)both would receive an equal number of debits.
D)impossible to determine without additional information.

Question

Quizplus · Accepted Answer

Actual overhead is the account that records the actual cost incurred for overhead expenses, while applied overhead is the account that records the estimated overhead cost allocated to the production process. Since actual overhead reflects the real cost incurred by the business, it will receive the most debits as expenses are recognized in this account. Applied overhead will only be debited when the predetermined overhead rate is applied to the actual direct labor hours or machine hours worked, which may not necessarily reflect the actual cost of the overhead.

If a Company Used Two Overhead Accounts (Actual Overhead and Applied