Question

The journal entry to transfer completed products from production to finished goods inventory includes which two of the following?

1) Debit to Finished Goods Inventory and Credit to Work in Process Inventory
2) Debit to Finished Goods Inventory and Credit to Cost of Goods Sold
3) Debit to Work in Process Inventory and Credit to Finished Goods Inventory
4) Debit to Cost of Goods Sold and Credit to Finished Goods Inventory

Answer 1

The correct journal entry to move completed products to finished goods inventory is a debit to Finished Goods Inventory and a credit to Work in Process Inventory, reflecting the production stage completion.

Step-by-step explanation:

The journal entry to transfer completed products from production to finished goods inventory includes a debit to Finished Goods Inventory and a credit to Work in Process Inventory. This entry moves the cost of the completed products from Work in Process Inventory to Finished Goods Inventory, reflecting the change in the status of the goods, from being in the process of manufacture to being completed and ready for sale. The correct option among those provided is option 1) Debit to Finished Goods Inventory and Credit to Work in Process Inventory.