Diaz Company Uses Process Costing in Its Two Processing Departments $\begin{array}{llr} \text { Wages Payable } &15,000\\ \text { Wages Expense } &&15,000\\\end{array}$

question 31

Short Answer

Diaz Company uses process costing in its two processing departments Assembly and Finishing.If the direct labor costs incurred for the Assembly Department totaling $15,000 are to be paid next month,which one of the following journal entries would be made to record this transaction?
a.
$\begin{array}{llr} \text { Wages Payable } &15,000\\ \text { Wages Expense } &&15,000\\\end{array}$

b.
$\begin{array}{llr} \text {WIP Inventory - Assembly } &15,000\\ \text {Wages Payable } &&15,000\\\end{array}$

c.
$\begin{array}{llr} \text {Wages Payable } &15,000\\ \text { WIP Inventory - Assembly} &&15,000\\\end{array}$

d.
$\begin{array}{llr} \text {Wages Expense } &15,000\\ \text { WIP Inventory - Assembly } &&15,000\\\end{array}$

e. $\text { None of the answer choices is correct.}$

Identify the critical events that determine the timing of net income recognition and the distinction between operating and non-operating income.

Distinguish between book value and carrying amount in the context of accounting records and financial statements.

Comprehend the criteria for reporting extraordinary items, discontinued operations, and special items according to GAAP and IFRS.

Understand the implications of accrual accounting on the measurement of earnings and its potential discrepancies with cash flows.

---

Definitions:

Average Collection Period

The typical time frame for a company to receive dues from its clients for goods or services offered on credit.

Operating Cycle

The duration of time it takes for a company to buy inventory, sell it, and convert the sale into cash.

Cash Disbursements

Money paid out by a company for expenses, operations, or investments.

Accounts Receivable Period

The accounts receivable period is the average number of days it takes for a company to collect payments owed by its customers after a sale has been made.