The Journal Entry to Record Payments Made on a Capital

question 80

Multiple Choice

The journal entry to record payments made on a capital lease would include all of the following except?

• A)debit to Rent Expense
• B)credit to Cash
• C)debit to Interest Expense
• D)debit to Lease Payment Obligation

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Definitions:

Process Costing System

An accounting method used where similar goods are produced in a continuous process, distributing costs over the units produced, making it easier to ascertain per unit cost.

Weighted-Average Method

A method of inventory costing that assigns a weighted average cost to each item in inventory, used in both perpetual and periodic inventory systems.

Process Costing System

A costing methodology used in manufacturing where costs are assigned to batches of products rather than individual items, suitable for homogeneous products.

Equivalent Units

The product of the number of partially completed units and their percentage of completion with respect to a particular cost. Equivalent units are the number of complete whole units that could be obtained from the materials and effort contained in partially completed units.