Que Corporation Uses a Process Cost Accounting System

question 74

Multiple Choice

Que Corporation uses a process cost accounting system. The company manufactured certain goods at a cost of $800 and sold them on credit to Are Corporation for $1,075. The complete journal entry to be made by Que at the time of this sale is:

• A) Debit Accounts Receivable $1,075; credit Sales $1,075; debit Cost of Goods Sold $800; credit Finished Goods Inventory $800.
• B) Debit Accounts Receivable $1,075; credit Sales $275; credit Finished Goods Inventory $800.
• C) Debit Cost of Goods Sold $1,075; credit Sales $1,075.
• D) Debit Finished Goods Inventory $800; debit Sales $1,075; credit Accounts Receivable $1,075; credit Cost of Goods Sold $800.
• E) Debit Accounts Receivable $1,075; debit Selling expense $800; credit Sales $1,075; credit Cost of Goods Sold $800.

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Definitions:

General Sales Tax

A tax applied uniformly on most goods and services purchased by consumers within a jurisdiction.

Progressive Federal Income Tax

A tax system where the tax rate increases as the taxable amount (income) increases, applied at the federal level.

Government's Revenue

The total financial income collected by the government from various sources, including taxes, fees, and investments.

Excise Tax

A tax levied on specific goods, services, or transactions, typically aimed at discouraging consumption of certain items or raising revenue.