Which of the following statements about under- or overapplied manufacturing overhead is correct? O After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead balance. At the end of the year, under- or overapplied overhead is eliminated by a closing entry. When annual financial statements are prepared, overapplied overhead is reported in current liabilities. When Manufacturing Overhead has a credit balance, overhead is said to be under-applied.