The cost of production of completed and transferred goods during the period amounted to $540,000,and the finished products shipped to customers had production costs of $375,000.The entry to record the transfer of costs from finished goods to cost of goods sold is

Question

Quizplus · Accepted Answer

The correct entry to record the transfer of costs from finished goods to cost of goods sold is to debit Cost of Goods Sold for the cost of finished goods sold ($375,000) and credit Finished Goods for the same amount. Therefore, the correct entry is:
Cost of Goods Sold 375,000
Finished Goods 375,000

Option A is incorrect because it transfers all production costs to Cost of Goods Sold, including the cost of goods that are still in inventory.

Option B is incorrect because it only transfers the cost of goods shipped to customers, not all production costs.

Option D is incorrect because it transfers all production costs, including the cost of goods still in inventory, which is not correct.

The Cost of Production of Completed and Transferred Goods During