Which of the Following Is the Correct Journal Entry to Transfer

question 114

Multiple Choice

Which of the following is the correct journal entry to transfer costs out of the Finishing Department, which is the last processing department?

• A) Debit Work in Process Inventory - Finishing Department and credit Finished Goods Inventory
• B) Debit Cost of Goods Sold and credit Finished Goods Inventory
• C) Debit Cost of Goods Sold and credit Work in Process Inventory - Finishing Department
• D) Debit Finished Goods Inventory and credit Work in Process Inventory - Finishing Department

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Definitions:

Substitution Effect

The substitution effect describes the change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Higher Wage

The increased remuneration or salary received by an employee, often as a result of promotions, market adjustments, or successful salary negotiations.

Labor for Leisure

The trade-off between working hours for income and spending time on relaxation or enjoyment activities.

Hourly Wage Rate

The hourly wage rate is the amount of money paid to an employee for one hour of work, often used to calculate overall earnings in jobs that compensate workers on an hourly basis.