Select the incorrect statement regarding the recognition of depreciation on manufacturing equipment.
A) Recognizing depreciation on manufacturing equipment is an asset exchange event.
B) Depreciation on manufacturing equipment is an indirect product cost.
C) Recognizing depreciation on manufacturing equipment decreases the equipment's book value and increases the Manufacturing Overhead account.
D) If the equipment was used to work on a job, the amount of depreciation must be entered on the appropriate job cost sheet.

Question

Quizplus · Accepted Answer

Depreciation on manufacturing equipment is a period cost and is not entered on the job cost sheet. It is recorded in the Manufacturing Overhead account and allocated to the products produced during the period through the application of overhead.

Select the Incorrect Statement Regarding the Recognition of Depreciation on Manufacturing