Maria alvarez, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable is maria correct discuss see notes page for discussion question 2-4 (textbook) maria is incorrect a debit balance only means that debits amounts exceed credit amounts in an account conversely. The exide company is a single product company that uses standard costing system to control its costs the standard and actual costs data for the most recent month to produce one unit of product is given below: problem-2-scava-img1 during the most recent month, 4,800 units of product were produced the comparison of. Get an answer for 'is there a rationale for believing debit balances are favorable and credit balances are unfavorable' and find homework help for other business questions at enotes.
Issued by the bank) updated but are surprised to find that the balance shown favourable balances (a) debit balance as per cash book is given and the balance as per pass book is to be ascertained (b) credit balance as per pass book is given and the balance as per cash unfavourable balance/overdraft balance. Debits and credits summary debits and credits summary discussion question q4 maria alvarez, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable is maria correct discuss see notes page for discussionchapter lo 2 define debits and credits. If a company uses exactly the standard quantity of direct material for its output, there will be no balance in the account direct materials usage variance if the actual price per unit of direct materials is more than the standard cost per unit, the difference will be entered as a debit into the account direct materials price variance. A credit means a the event is favorable b the event is unfavorable c always increase the account d always decrease the account e the right hand b trial balance c chart of accounts d double-entry system ____ 7 debit entries are used to a increase asset accounts b decrease expense accounts.
As an illustration of this problem, when official data for all the world's countries are added up, exports exceed imports by almost 1% it appears the world is running a positive balance of trade with itself this cannot be true, because all transactions involve an equal credit or debit in the account of each nation the discrepancy. Unfavourable bank balance means : credit balance in passbook ✓ credit balance in cash book debit balance in cash book none of these favourable bank balance means : credit balance in the cash book credit balance in passbook debit balance in the cash book ✓ both b and c a bank reconciliation statement is. When a country has unfavorable or adverse balance of payments, it is regarded as herald of disaster because the country by having deficit in her balance of payments either decreases her balances abroad or increases her foreign debits when it has favorable credit balance, it is considered that the country is heading.
When preparing the financial statements, a debit balance in the materials usage variance account (which means an unfavorable variance) will have to be credit balances in the variance accounts represent favorable variances and will reduce the standard costs that are reported as debit balances in inventory on the. 2 normal , favorable , or debit balance as per cash book then it s called debit balance of cash book credit balance of cash book if the balance of cash book is given as 1 abnormal , unfavorable , overdraft or credit balance as per cash book then it is called credit balance of cash book debit balance of pass book. (d) a credit balance in the pass book indicates excess of deposits over withdrawals [hints: (d) a credit balance in the pass book implies a favourable balance indicates excess of deposits over withdrawals and a debit balance in the pass book implies unfavorable balance ie, a overdraft hence statement.
2 when credit balance (favourable balance) as per passbook is given and the balance as per cash book is to be ascertained 3 when credit balance as per cash book (unfavourable balance/overdraft balance) is given and the balance as per passbook is to ascertained 4 when debit balance as per. In this example, the direct labor efficiency variance is positive (favorable), as the actual amount of labor used (230) was less than the standard amount of all other significant direct labor efficiency variances (debit or credit balances) are split between inventory accounts and the cost of goods sold account.
The sooner an unfavorable variance is detected, the sooner attention can be directed towards fixing any problems in manufacturing, the standard cost of a finished product is calculated by adding the standard costs of the direct material, direct labor, and direct overhead an unfavorable variance is the opposite of a favorable. In the example used above the direct labor price variance was unfavorable leaving a debit balance of 690 on the variance account, and the direct labor efficiency variance was favorable leaving a credit balance of 300 on the variance account assume for simplicity that these were the only direct labor.
Balance appears on the credit side of the bank's books and on the debit side of our books that, whenever we deposit money into our account, the bank credits our account, ie the amount that they according to the january bank statement, does oliver twist stores have a favourable or unfavourable. The price and quantity variances are generally reported by decreasing income (if unfavorable debits) or increasing income (if favorable credits), although other outcomes are possible examine when more is spent than applied, the balance (zz) is transferred to variance accounts representing the unfavorable outcome. Debits and credits summary lo 2 define debits and credits and explain their use in recording business transactions chapter 2-12 discussion question q4 maria alvarez, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable is maria correct discuss see notes.