Q18RQ.

Question

Question: Why does the sale of a completed job require two journal entries? What are they?

Step-by-Step Solution

Verified

Answer

Answer:

One journal entry is required to recognize the revenue earned (sales price) and another journal entry is required to remove the product from inventory when it is shipped to the customer and recognize the expense incurred (cost).

1Step 1: Revenue

Revenue means the income earned by the company from the main source of the business. It is the total sales value of the company.

2Step 2: Journal entry to record the sale of the completed job

Date	Particulars	Debit ($)	Credit ($)
1.	Accounts receivable	XXX
	Sales		XXX

2.	Cost of goods sold	XXX
	Finished goods inventory		XXX

When the company makes a sales, two journal entry are required to be record. One entry is passed to record the sale of the company and other is made for reducing the inventory from the current assets of the company

Q. 17-20RQ

Q19RQ.

Other exercises in this chapter

Q. 17-21RQ

Refer to the previous question. Give the journal entry to adjust the Manufacturing Overhead account for overallocated or underallocated overhead.

View solution

Q. 17-20RQ

If a company incurred $5,250 in actual overhead costs and allocated $5,575 to jobs, was the overhead overallocated or underallocated? By how much?

View solution

Q19RQ.

Question: Explain the difference between underallocated overhead and overallocated overhead. What causes each situation?

View solution

Q2SE

Back Country manufactures backpacks. Its plant records include the following materials-related dataJournalize the entries to record the transactions, post to th

View solution