Question

At the end of the accounting period the MOH control account has a debit balance of $100. What caused this balance?

Answer 1

The debit balance of $100 in the MOH control account at the end of the accounting period could be caused by factors such as higher overhead expenses, under-applied overhead, or recording inaccuracies.

Step-by-step explanation:

The debit balance of $100 in the MOH control account at the end of the accounting period could be caused by several factors:

1. Overhead expenses were higher than the overhead applied to production. This means that the actual overhead costs incurred exceeded the amount allocated to the production process.
2. Under-applied overhead occurred when the allocated overhead costs were less than the actual overhead expenses incurred.
3. Inaccuracies or mistakes in recording transactions could also contribute to the debit balance in the MOH control account.

It is important to investigate the underlying causes of the debit balance to ensure accurate financial reporting and make any necessary adjustments.