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

Question

Quizplus · Accepted Answer

When the balls and their costs are transferred from the coloring process to the finishing process, it means that the finishing process has taken over the production of the ping-pong balls. Therefore, there would be a transfer of costs from the WIP (work-in-progress) inventory of the coloring process to the WIP inventory of the finishing process. This would involve debiting the WIP inventory of the finishing process and crediting the WIP inventory of the coloring process. Therefore, option B is the correct answer. Options A, C, and D are not correct because they do not adequately reflect the transfer of costs between the two processes.

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