Using a process costing system,the journal entry to record the cost of completed goods when sold includes:
A)a debit to Finished Goods Inventory.
B)a credit to Cost of Goods Sold.
C)a debit to Work in Process Inventory.
D)a credit to Finished Goods Inventory.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

The correct journal entry to record the cost of completed goods when sold includes a credit to Finished Goods Inventory. This is because when goods are sold, they are moved out of Finished Goods Inventory, which decreases the balance in that account, hence the credit entry.

Using a Process Costing System,the Journal Entry to Record the Cost