As goods are sold, the cost of the goods is transferred from

Question

Quizplus · Accepted Answer

When goods are sold, their cost is transferred from the Finished Goods account (where they were accounted for as completed products waiting to be sold) to the Cost of Goods Sold account (where they are recorded as goods that have been sold). This is done to reflect the cost of goods sold in the income statement and to avoid double-counting inventory costs. Therefore, the correct answer is A, Finished Goods to Cost of Goods Sold.

As Goods Are Sold, the Cost of the Goods Is