When Goods Are Transferred from the Work-In-Process Inventory Account to the Finished

question 132

Multiple Choice

When goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account:

• A)total assets and total liabilities increase by the same amount.
• B)total assets of the company remain constant.
• C)total equity and total assets increase with the same amount.
• D)total liabilities increases and total equity decreases by the same amount.

---

Definitions:

Prime Rate

The prime rate is the interest rate that commercial banks charge their most creditworthy customers, often used as a benchmark for various loan products.

Bond Indenture

A legal contract between a bond issuer and the bondholders, outlining the terms, conditions, and covenants of the bond issue.

Floating-Rate Payments

Refers to interest or dividend payments that adjust periodically based on a reference rate, like LIBOR or the Prime Rate.

Fixed-Rate Payments

Payments made in consistent amounts over time in the context of a loan or other financing arrangement, where the interest rate does not change.