Q17RQ
Question
Question: Give the journal entry for the completion of a job. How is the accounting equation affected?
Step-by-Step Solution
Verified Answer
Answer:
When a job is completed, Finished Goods Inventory is debited and Work-in-Process Inventory is credited. The effect on the accounting equation is that one asset (Finished Goods Inventory) is increased and another asset (Work-in-Process Inventory) is decreased.
1Step 1: Finished goods inventory
Finished goods inventory means the total stock available for sale to the customers. It is the goods which are completely manufactured.
2Step 2: Journal entry to record the completion of the job
Date | Particulars | Debit ($) | Credit ($) |
| Finished goods inventory | XXX |
|
| Work in process inventory |
| XXX |
This transaction may increase the one asset and decrease the other asset. Its total effect is null.
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