Question

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had total production costs of $375,000. The entry to record the transfer of costs from work in process to finished goods is:________

A. Finished Goods 540,000
Work in Process 540,000
B. Work in Process 375,000
Finished Goods 375,000
C. Work in Process 540,000
Finished Goods 540,000
D. Finished Goods 375,000
Work in Process

Answer 1

Answer: The correct answer is "A. Finished Goods 540,000 Work in Process 540,000"

Explanation: The entry to record the transfer of costs from work in process to finished goods is:

FINISHED GOODS 540,000

WORK IN PROCESS 540,000

Because the "Finished goods" are assets, and increase by debit, and the "work in process" account is a cost account that decreases by credit.