The correct accounting entry for transferring goods from the Mixing Department to the Baking Department in a bakery is to debit the Work in Process account for the Baking Department and credit the Work in Process account for the Mixing Department.
When a Bakery transfers goods from the Mixing Department to the Baking Department, the accounting entry would be Debit: Work in Process — Baking Department Credit: Work in Process — Mixing Department. This entry reflects the transfer of production costs from one department to another within the same company, a common practice in process costing used in manufacturing environments where goods go through multiple stages of production. In this case, the Work in Process account for the Baking Department is debited because this department is now incurring the costs associated with the goods received from the Mixing Department. Correspondingly, the Work in Process account for the Mixing Department is credited to reflect the transfer of costs out of this department.