ABC produces ping pong balls using a three-step sequential process that includes molding,coloring and finishing.When the balls and associated costs are transferred out of the coloring process and into the finishing process,the journal entry would include a:

Question

Quizplus · Accepted Answer

When the balls and associated costs are transferred out of the coloring process and into the finishing process, it means that the coloring process has been completed and the costs associated with it have been transferred to the finishing process. This is a transfer between two WIP (Work-in-Process) inventory accounts, and therefore, the journal entry would involve debiting one WIP account and crediting the other. Since the balls and associated costs are being transferred to the finishing process, the WIP account for finishing would be debited and the WIP account for coloring would be credited. Hence, the correct choice is B.

ABC Produces Ping Pong Balls Using a Three-Step Sequential Process