Final answer:
The most common method for disposing of over- or under applied overhead in accounting is the adjustment entry.
Step-by-step explanation:
The most common method for disposing of over- or under applied overhead in accounting is the adjustment entry. This entry is used to allocate the over- or underapplied overhead to the appropriate accounts. Let's say a company has overapplied overhead, meaning it allocated more overhead than what was actually incurred. The adjustment entry would involve decreasing the overhead account and increasing the cost of goods sold or finished goods inventory account.