CGI Corporation uses a process costing system to manufacture its product.As part of the processing activities in its human resource process, which of the following would CGI use to record payroll costs of its factory workers?

Question

Quizplus · Accepted Answer

In a process costing system, the payroll costs of factory workers are allocated to the Work in Process (WIP) account. The correct entry to record this would be to debit the WIP account, which represents the cost of unfinished goods. The credit would be the Wages Payable account, which represents the amount owed to employees for their work during the pay period. Therefore, the correct option is A) Debit work in process, credit wages payable.

Option B is incorrect because it debits the wages expense, which is not accurate since expenses are recorded when they are incurred, not when they are paid. Option C is incorrect because it shows a payment of wages, but does not allocate the costs to the production process. Option D is incorrect because it credits Retained Earnings, which is a stockholder's equity account and not related to the payroll costs of factory workers.

CGI Corporation Uses a Process Costing System to Manufacture Its