Wyman Corporation Uses a Process Costing System

question 100

Multiple Choice

Wyman Corporation uses a process costing system.The company manufactured certain goods at a cost of $800 and sold them on credit to Percy Corporation for $1,075.The complete journal entry to be made by Wyman at the time of this sale is:

• A)Debit Accounts Receivable $1,075;credit Sales $1,075;debit Cost of Goods Sold $800;credit Finished Goods Inventory $800.
• B)Debit Accounts Receivable $1,075;credit Sales $275;credit Finished Goods Inventory $800.
• C)Debit Cost of Goods Sold $1,075;credit Sales $1,075.
• D)Debit Finished Goods Inventory $800;debit Sales $1,075;credit Accounts Receivable $1,075;credit Cost of Goods Sold $800.
• E)Debit Accounts Receivable $1,075;debit Selling expense $800;credit Sales $1,075;credit Cost of Goods Sold $800.

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Definitions:

Long-Term Investments

Assets that a company intends to hold for more than a year, such as stocks, bonds, real estate, and investment in subsidiary companies, which are not easily converted into cash.

Dividend Income

Income received from owning shares in a company, typically paid out from the company's profits.

Gain Potential

The possible financial profit that can be achieved from an investment, considering the risk and opportunity cost.

Trading Securities

Financial assets that are purchased with the intention of selling them in the short term to profit from price fluctuations.