Oakland Company paid $200 cash for various manufacturing overhead costs, not before recorded. How does this transaction affect the financial statements? $$\begin{array} { | l | l | l | l | l | l | l | l | l | l | }
\hline { \text { Assets } } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \
\hline \text { Cash } & + & \text { Mfg. } \mathrm { OH } & & & & & & & \
\hline
\end{array}$$

Question

Oakland Company paid $200 cash for various manufacturing overhead costs, not before recorded. How does this transaction affect the financial statements? $$\begin{array} { | l | l | l | l | l | l | l | l | l | l |  } 
\hline  { \text { Assets } } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \
\hline \text { Cash } & + & \text { Mfg. } \mathrm { OH } & & & & & & &  \
\hline
\end{array}$$

Quizplus · Accepted Answer

The cash payment decreases assets (cash) by $200 and increases manufacturing overhead (an expense) by $200, which does not affect liabilities or equity directly.

Oakland Company Paid $200 Cash for Various Manufacturing Overhead Costs