Trout CoOrdered and Received Inventory Worth $45,000 on Credit

question 58

Multiple Choice

Trout Co.ordered and received inventory worth $45,000 on credit.What is the effect of this transaction on the accounting equation?

• A)Assets increases by $45,000 and liabilities increases by $45,000.
• B)Assets increases by $45,000 and liabilities decreases by $45,000.
• C)Assets decreases by $45,000 and liabilities increases by $45,000.
• D)Assets decreases by $45,000 and liabilities decreases by $45,000.

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Definitions:

Units Started

The quantity of units that began production over a particular period in the manufacturing process.

Beginning Work in Process

The inventory of production goods that have been partially completed but are not yet finished at the start of a period.

Ending Work in Process

The value of goods that are in the production process but not yet complete at the end of an accounting period.

Transferred Out

Transferred Out is a term often used in accounting and inventory control to denote goods or assets moved from one department, location, or account to another.