Accountants at Amalgamated Corporation Incorrectly Journalized a $50,000 Equipment Purchase

question 127

Multiple Choice

Accountants at Amalgamated Corporation incorrectly journalized a $50,000 equipment purchase as a debit to Buildings.This error was not discovered before the journal entry was posted.What is the correcting entry?

• A)Debit Buildings and credit Equipment for $50,000 each.
• B)Debit Equipment and credit Buildings for $50,000 each.
• C)Debit Buildings and credit Equipment for $100,000 each.
• D)Debit Equipment and credit Buildings for $100,000 each.
• E)Debit Equipment for $100,000 and credit Buildings for $50,000.

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Definitions:

Process Costing System

An accounting methodology used for homogenous products, allocating costs across units of production, making it easier to determine per-unit costs.

Processing Department

A division within a manufacturing facility where a specific type of processing or production takes place.

Operations

The day-to-day activities required for the continued functioning of a business, focusing on producing goods or providing services.

Weighted-Average Method

An inventory costing method that assigns the same cost to each unit, calculated as the total cost of goods available for sale divided by the total units available.