To transfer work in process inventory to finished goods inventory:
A) debit finished goods and credit work in process.
B) debit work in process and credit finished goods.
C) add direct labour to the work in process inventory.
D) add direct labour and direct materials to the finished goods inventory.

Question

Quizplus · Accepted Answer

When transferring work in process inventory to finished goods inventory, the correct accounting entry is to debit Finished Goods (increasing its balance) and credit Work in Process (decreasing its balance). This reflects the movement of goods from being in production to being completed.

To Transfer Work in Process Inventory to Finished Goods Inventory