When completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Finished Goods.

Question

Quizplus · Accepted Answer

This is the correct accounting treatment for the sale of completed goods. The cost of goods sold is debited to reflect the expenses incurred in producing the goods, and the finished goods account is credited to reduce its balance and reflect the fact that the goods have been sold.

When Completed Goods Are Sold, the Transaction Is Recorded as a Debit