In a process cost system, the cost of completed production in Department 1 is transferred to Department 2 by which of the following entries?

A) debit Work in Process Department 2, credit Work in Process Department 1.
B) debit Finished Goods, credit Work in Process Department 2.
C) debit Work in Process - Department 2, credit Cost of Goods Sold Department 1.
D) debit Work in Process Department 2, credit Finished Goods Department 1.

Question

Caitlin Tomlinson · Accepted Answer

Final Answer : A, Explanation :  The correct entry to transfer the cost of completed production from Department 1 to Department 2 in a process cost system is to debit Work in Process Department 2 and credit Work in Process Department 1. This reflects the movement of costs from one production department to the next in the manufacturing process.

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