At the end of the accounting period, adjustments for under- or overapplied overhead are simply posted to the inventory accounts.

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Adjustments for under- or overapplied overhead are not simply posted to the inventory accounts. They are first allocated to Cost of Goods Sold and then to Finished Goods Inventory, Work in Process Inventory, and/or Raw Materials Inventory, depending on where the overhead was originally applied.

At the End of the Accounting Period, Adjustments for Under-