Ledger entries
You'll learn how to record ledger entries for production overhead absorption adjustments at the period end. This short lesson covers the key principle: when overhead is under absorbed, you debit the profit and loss account with the additional expense; when over absorbed, you credit it to reduce the charge.
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In this lesson
- 0:00 Understanding absorption adjustments
- 0:14 Under absorption ledger entries explained
- 0:33 Over absorption ledger entries explained
- 1:16 Key summary and exam tips
About this lesson
Understanding this distinction is essential for accurate costing entries in Performance Management and Financial Management papers, and it's a straightforward technique that appears regularly in exam questions.
Duration: 2m
Transcript
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