COST ACCOUNTING
JOB ORDER COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Debit completed goods, credit work in process
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Debit cost of goods sold, credit finished goods
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Debit account receivables, credit sales revenue
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Debit finished goods, credit work in process
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Detailed explanation-1: -The journal entry to record the completion of goods includes: Answer: b) a credit to work in process. To record the completion of goods the corresponding entry is a debit to finished goods and credit to work in process.
Detailed explanation-2: -Once the product is complete, the company needs to reclass the value of that inventory to finished goods since it is now ready to be sold. The journal entry would be a debit to inventory-finished goods and a credit to inventory-WIP. The net impact to the balance sheet is zero.
Detailed explanation-3: -When an item is ready to be sold, it is transferred from finished goods inventory to sell as a product. You credit the finished goods inventory, and debit cost of goods sold.
Detailed explanation-4: -A work-in-progress journal entry is a record that accounting professionals use to document current assets on a company’s balance sheet. The items in this journal entry don’t include any raw materials or finished goods.
Detailed explanation-5: -It is recorded as a debit to “WIP” and as a credit to “salaries/wages payable”. The salary/wage expenses related to the production within the reported period represent the direct labor amount. 3.