Daphne's Desktops Inc

question 5

Multiple Choice

Daphne's Desktops Inc., which uses a process-costing system, passes completed production from Department A to Department B for further manufacturing. The journal entry to record completed production in Department A requires:

• A) a debit to Work-in-Process Inventory and a credit to Finished-Goods Inventory.
• B) a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory.
• C) a debit to Finished-Goods Inventory and a credit to Work-in-Process Inventory: Department A.
• D) a debit to Work-in-Process Inventory: Department A and a credit to Work-in-Process Inventory: Department B.
• E) a debit to Work-in-Process Inventory: Department B and a credit to Work-in-Process Inventory: Department A.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets compared to its current liabilities.

Financial Statements

Authorized documents reflecting the economic actions and condition of an organization, individual, or different party, often encompassing the balance sheet, income statement, and cash flow statement.

Common Shares

Equity securities that represent ownership in a corporation, giving shareholders voting rights and a residual claim on corporate earnings in the form of dividends.

Total Equity

Represents the value left in a company after all liabilities have been subtracted from assets, essentially the net assets owned by shareholders.