Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

Which of the following is the correct journal entry to record the transfer of jobs 306 and 307 from Work in Process to Finished Goods Inventory?

Debit Work in Process Inventory; Credit Finished Goods Inventory

Debit Cost of Goods Sold; Credit Finished Goods Inventory

Debit Work in Process Inventory; Credit Cost of Goods Sold

Debit Finished Goods Inventory; Credit Work in Process Inventory

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Verified step by step guidance

Understand the context: The transfer of jobs from Work in Process (WIP) to Finished Goods Inventory represents the completion of production. This means the costs accumulated in WIP for these jobs are now moved to Finished Goods Inventory, which is an asset account.

Identify the accounts involved: Work in Process Inventory is reduced because the jobs are no longer in production. Finished Goods Inventory is increased because the completed jobs are now part of the company's inventory ready for sale.

Determine the type of accounts: Work in Process Inventory and Finished Goods Inventory are both asset accounts. To decrease Work in Process Inventory, you need to credit it. To increase Finished Goods Inventory, you need to debit it.

Formulate the journal entry: The correct journal entry to record this transfer is to debit Finished Goods Inventory and credit Work in Process Inventory. This reflects the movement of costs from one asset account to another.

Review the logic: Ensure the journal entry aligns with the accounting principle of matching costs to the appropriate stage of production. The transfer from WIP to Finished Goods Inventory is a standard procedure in job order costing systems.