Ask Question
20 December, 03:48

At the end of the accounting period, a company's overhead was overapplied by $400. The Factory Overhead account was properly adjusted. What effect did the adjustment have on net income?

+3
Answers (1)
  1. 20 December, 04:11
    0
    The overapplied factory overhead results in more expense. The overapplied factory overhead results in increase in cost of good sold. Over-application means that actual overhead are less than reported expense. At the end of the accounting period the company will pass following accounting entry to adjust over application

    Debit FOH account 400

    Credit Cost of Good Sold 400

    So after this adjustment the net income will increase by 400 dollars.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “At the end of the accounting period, a company's overhead was overapplied by $400. The Factory Overhead account was properly adjusted. What ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers