If ending variance account balances are immaterial, they can be closed directly to Cost of Goods Sold.

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Quizplus · Accepted Answer

Ending variance account balances are typically closed to Cost of Goods Sold when they are immaterial. This is because these balances represent the difference between the standard cost of goods sold and the actual cost of goods sold, and if they are not significant, they are not worth tracking separately. Closing these balances directly to Cost of Goods Sold simplifies the accounting process and is an acceptable practice as long as the balances are not significant.

If Ending Variance Account Balances Are Immaterial, They Can Be