At year-end,Marshall Enterprise's Factory Overhead account has a credit balance of $5,000,which is not a material amount.What entry should Marshall make at year-end?
A)No entry is needed.
B)Debit Factory Overhead $5,000; credit Cost of Goods Sold $5,000.
C)Debit Cost of Goods Sold $5,000; credit Factory Overhead $5,000.
D)Debit Factory Overhead $5,000; credit Work in Process Inventory $5,000.
E)Debit Factory Overhead $5,000; credit Finished Goods Inventory $5,000.

Question

Quizplus · Accepted Answer

A credit balance in the Factory Overhead account indicates that overhead has been overapplied. The correct adjustment is to debit Factory Overhead and credit Cost of Goods Sold, which decreases the cost of goods sold for the amount of overhead that was overapplied.

At Year-End,Marshall Enterprise's Factory Overhead Account Has a Credit Balance