Chapter - 4 Bookkeeping For Overheads

Question 1

When transfering production overheads to the production account in the ledger the two accounts involved would be the production overheads account and the production account, which account will be debited and which will be credited ?

Answer 1

• Debit production
• Credit production overheads

Question 2

When crediting over-absorbed overheads to the statement of profit or loss in the ledger the two accounts involved would be the production overheads account and the statement of profit or loss, which account will be debited and which will be credited ?

Answer 2

• debit production overheads
• credit statement of profit or loss

Question 3

When charging under-absorbed overheads to the statement of profit or loss in the ledger the two accounts involved would be the production overheads account and the statement of profit or loss, which account will be debited and which will be credited ?

Answer 3

• debit statement of profit or loss
• credit production overheads