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Barnett, Inc., which uses a process-costing system, transfers completed production from Department no. 1 to Department no. 2 for further work. Which of the following best describes the account that would be credited to record this transfer?


a. Cost of Goods Transferred

b. Finished-Goods Inventory: Department no. 1

c. Finished-Goods Inventory: Department no. 2

d. Work-in-Process Inventory: Department no. 1

e. Work-in-Process Inventory: Department no. 2

Respuesta :

Answer:

d. Work-in-Process Inventory: Department no. 1

Explanation:

The journal entry is shown below:

Work-in-Process Inventory: Department no. 2 A/c Dr XXXXX

          To Work-in-Process Inventory: Department no. 1 A/c XXXXX

(Being the transfer is recorded)

For transferring this, we debited the transfere account and credited the transferor account so in this case, the department 2 is debited and department 1 is credited

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