Both debit and credit balances of Factory Overhead are shown in the Adjusted Trial Balance columns of the work sheet; however, neither of these amounts is extended to the Income Statement or to the Balance Sheet columns.

Question

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Factory Overhead is an expense account and its balance is closed to the Income Statement column. It is not a balance sheet account, so it is not extended to the Balance Sheet column. Both debit and credit balances are shown in the Adjusted Trial Balance column to ensure that the account is properly adjusted, but these amounts are not directly included in the final financial statements.

Both Debit and Credit Balances of Factory Overhead Are Shown