WHICH of the following is the correct journal entry as would appear in the cost books when there is under recovery of overheads?

CA Intermediate · Cost and Management Accounting · MTP · January 2025
WHICH of the following is the correct journal entry as would appear in the cost books when there is under recovery of overheads?
(A) Cost of Sales A/c.....Dr. xxx To Administrative Overhead Control A/c xxx
(B) Production Overhead Control A/c.....Dr. xxx To Work-in-Process Ledger Control A/c xxx
(C) Costing Profit & Loss A/c......Dr. xxx To Administrative Overhead Control A/c xxx
(D) Work-in-Process Ledger Control A/c.Dr. xxx To Production Overhead Control A/c xxx

Suggested Answer and Working Notes:

Correct Answer: Option (C)

Costing Profit & Loss A/c......Dr. xxx To Administrative Overhead Control A/c xxx

Topics: Overheads - Absorption Costing Method, Cost Sheet

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