The Packing Department transferred out completed units with a cost of $74,000.This transfer should be recorded with the following entry:

Question

Quizplus · Accepted Answer

When a department transfers completed units to another department or to finished goods inventory, it is recorded as a transfer out and the cost of the units is debited to the receiving department or inventory account, and credited to the transferring department. Therefore, the correct entry would be:

Debit: Finished goods inventory or receiving department account - $74,000
Credit: Packing department account - $74,000

The Packing Department Transferred Out Completed Units with a Cost