In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries?
A) debit Work in Process-Dept. B; credit Work in Process-Dept. A
B) debit Work in Process-Dept. B; credit Finished Goods-Dept. A
C) debit Work in Process-Dept. B; credit Cost of Goods Sold-Dept. A
D) debit Finished Goods-Dept. A; credit Work in Process-Dept. B

Question

Quizplus · Accepted Answer

In a process cost system, the cost of completed production in one department is transferred to the next department as work in process. Therefore, the correct entry is to debit the work in process account of the second department (Department B) and credit the work in process account of the first department (Department A). This maintains the balance of work in process at each stage of production.

In a Process Cost System, the Cost of Completed Production