During March, Zea Incorporated Transferred $50,000 from Work in Process

question 308

Multiple Choice

During March, Zea Incorporated transferred $50,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $56,000. The journal entries to record these transactions would include a:

• A) credit to Cost of Goods Sold of $56,000.
• B) debit to Finished Goods of $56,000.
• C) credit to Work in Process of $50,000.
• D) credit to Finished Goods of $50,000.

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Definitions:

Direct Write-off Method

An accounting method for uncollectible receivables where the specific account's balance is directly removed from accounts receivable.

Allowance Method

A technique in accounting used to adjust accounts receivable for the amount estimated to be uncollectible.

Bad Debts

Accounts receivable that are considered uncollectible, representing losses to the company.

Accounts Receivable Turnover

Accounts Receivable Turnover is a financial metric that measures how efficiently a company collects cash from its credit sales, calculated by dividing total credit sales by the average accounts receivable during a period.