Debits to Cost of Goods Sold typically represent the

Question

Quizplus · Accepted Answer

Debits to Cost of Goods Sold represent the costs of items that have been sold, which is an expense that needs to be recognized. Therefore, choice B is the best answer. A represents the transfer of completed items to Finished Goods Inventory, which would result in a credit to Cost of Goods Sold. C represents the selling price of items sold, which would be recognized as revenue instead of a cost. D represents the cost of goods manufactured, which would be recognized as an asset in the form of inventory until the items are sold.

Debits to Cost of Goods Sold Typically Represent the