Why are unfavorable variances recorded by using debit entries and favorable variances recorded by using credit entries?

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Financial and Managerial Accounting the basis for business decisions

ISBN: 978-0078111044

16th edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

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Question Posted: Jun 10, 2016 05:31 AM

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"Unfavorable variances will always have debit balances, whereas favorable variances will always have credit balances." Is this statement true or false? Why?
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Why are unfavorable variances recorded by using debit entries and favorable variances recorded by using credit entries?

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Unfavorable variances are recorded by debit entries because they represent costs in excess ...View the full answer

Financial and Managerial Accounting the basis for business decisions

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