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.

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Definitions:

Variable Costing

An accounting method that only considers variable costs (costs that change with production volume) in product pricing and decision making.

Unit Product Cost

The cumulative expense of manufacturing a single product unit, encompassing direct materials, direct labor, and overhead costs.

Operating Income

This represents the earnings before interest and taxes (EBIT) derived from a company's principal operating activities.

Year 2

Refers to the second year of a specific time frame, project, or financial period.