Aladdin Ltd Sells Inventory for a Profit to Its Subsidiary,Jasmine

question 42

Multiple Choice

Aladdin Ltd sells inventory for a profit to its subsidiary,Jasmine Ltd,to be used as machinery in Jasmine Ltd's production process.The consolidation worksheet of Aladdin Ltd with respect to this transaction only should ?not include .....:

• A) a debit to sales.
• B) a credit to cost of sales.
• C) a credit to inventories.
• D) a credit to machinery.
• E) None of the given answers.

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Definitions:

Job-Order Costing System

An accounting system used to assign costs to specific production batches or jobs, helping in tracking the cost of materials, labor, and overhead per job.

Direct Labor-Hours

denotes the total hours worked directly on the production of goods, used in assigning labor costs to products or services.

Forming Department

Specific section within a manufacturing process where materials are shaped or formed as part of the product's construction.

Finishing Department

A sector in manufacturing where products undergo final processing, assembly, inspection, or packaging before being declared finished goods.