Question

The journal entry to record the use of utilities in a factory could include which two of the following:

a. Debit to Factory Overhead
b. Credit to Factory Overhead
c. Debit to Factory Utilities Payable
d. Credit to Factory Utilities Payable
e. Credit to Raw Materials
f. Credit to Factory Wages Payable

Answer 1

Answer: Debit to Factory Overhead.
Credit to Factory Utilities Payable.

Explanation:Utilities are part of actual overhead costs. It is a necessary cost in order to operate the factory, but is not DIRECT Labor or DIRECT Material.