Breight, 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.

Question

Quizplus · Accepted Answer

When production is completed in Department no. 1 and transferred to Department no. 2 for further processing in a process-costing system, the account credited is Work-in-Process Inventory: Department no. 1. This reflects the transfer of costs from one department's work-in-process to another's, indicating the completion of the first department's work on the items.