The Packing Department transferred out completed units with a cost of $74,000.This transfer should be recorded with the following entry:
$\begin{array}{llr}
\text { Finished Goods Inventory } &74,000\
\text { Goods in Process Inventorv Packing Dept } &&74,000\
\end{array}$

Question

The Packing Department transferred out completed units with a cost of $74,000.This transfer should be recorded with the following entry:
 $\begin{array}{llr}
  \text { Finished Goods Inventory } &74,000\
 \text {  Goods in Process Inventorv Packing Dept } &&74,000\
\end{array}$

Quizplus · Accepted Answer

When completed units are transferred out from one department to another, it is recorded as a journal entry with a credit to the WIP (work-in-progress) account of the transferring department and a corresponding debit to the finished goods inventory account of the receiving department. Therefore, the correct accounting entry for the given scenario would be a debit to Finished Goods Inventory and a credit to Work-In-Progress. However, as no information is given about the cost of goods sold or any other relevant accounts, it is not possible to determine the exact journal entry.