The journal entry to record manufacturing overhead applied to Job #40 debits Blank______.

Question

Multiple choice question.

Cost of goods sold and credits Manufacturing overhead

Manufacturing overhead and credits Work in process

Cost of goods sold and credits Work in process

Work in process and credits Manufacturing overhead

Answer 1

The correct journal entry to record manufacturing overhead applied to Job #40 is:

Work in process and credits Manufacturing overhead.

This is because when manufacturing overhead is applied to a specific job, it increases the Work in Process inventory (as the costs are associated with jobs being worked on) and decreases the Manufacturing Overhead account (which is a temporary account used to accumulate overhead costs until they are applied to jobs).