Final answer:
Statement C is incorrect regarding job-order costing. Manufacturing Overhead is credited and Work in Process Inventory is debited when overhead costs are applied to jobs.
Step-by-step explanation:
The student has asked about the accuracy of statements related to job-order costing, which is an accounting method used to assign costs to individual jobs or batches of products. Among the statements provided, the one that is not true is C: Manufacturing overhead costs are applied to jobs by crediting the Manufacturing Overhead account and debiting it to Work in Process Inventory. In reality, the Manufacturing Overhead account is debited when overhead costs are incurred, and credited when overhead is applied to Work in Process Inventory.
Job-order costing uses materials requisition forms to trace materials to jobs and time tickets to trace direct labor to jobs. Manufacturing overhead, which includes indirect costs such as utilities, depreciation, and indirect labor, cannot be easily traced to specific jobs and is therefore allocated using a predetermined overhead allocation rate. However, the statement that overhead costs are applied by crediting Manufacturing Overhead is incorrect. When overhead costs are applied to jobs, the Manufacturing Overhead account is credited (as overhead is allocated) and the Work in Process Inventory account is debited to reflect the cost of overhead applied to production.