Costs Are Transferred from the Balance Sheet to the Income

question 123

Multiple Choice

Costs are transferred from the balance sheet to the income statement as cost of goods sold when ________.

• A) finished goods are sold
• B) goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account
• C) direct materials, direct labor and manufacturing overhead are transferred to the beginning Work-in-Process Inventory account
• D) the total of Cost of Goods Manufactured is determined

---

Definitions:

Chapter 7

A chapter under the U.S. Bankruptcy Code that deals with the process of liquidation, where a debtor's assets are sold off to pay creditors.

Debtor's Estate

All legal or equitable interests of the debtor in property at the time of bankruptcy filing.

Involuntary Petitions

Legal filings typically used in bankruptcy laws, forcibly initiating bankruptcy proceedings against a debtor by creditors.

Chapter 7

A provision of the bankruptcy code that provides for "liquidation," wherein a debtor's non-exempt assets are sold and the proceeds distributed to creditors.