Multiple Choice Questions:

1) The cost of units sold is recorded by debiting Cost of Goods Sold and crediting:

A) Finished Goods Inventory.

B) Sales Revenue.

C) Work-in-Process Inventory.

D) Wages Payable.

2) Jacob Company incurred $7,000 for indirect labor in Department III. The journal entry to record indirect labor utilized is:

A) Debit manufacturing Overhead, $7,000; credit Accounts Payable, $7,000.

B) Debit Accounts Payable, $7,000; credit Manufacturing Overhead, $7,000.

C) Debit manufacturing overhead, $7,000; credit Wages Payable, $7,000.

D) Debit Wages Payable, $7,000; credit Manufacturing Overhead, $7,000.

3) Michael Paints used a predetermined overhead allocation rate to allocate $75,000 and $65,000 of indirect costs to Coloring Department and Mixing Department, respectively. The journal entry to record the allocation of overhead costs to the Coloring Department is:

A) debit Manufacturing Overhead, $75,000; credit Work-in-Process Inventory—Mixing, $75,000.

B) Debit Work-in-Process Inventory—Coloring, $75,000; credit Manufacturing Overhead, $75,000.

C) Debit Work-in-Process Inventory—Coloring, $65,000; credit Manufacturing Overhead, $65,000.

D) Debit Manufacturing Overhead, $65,000; credit Work-in-Process Inventory—Mixing, $65,000.

4) Michael Paints has two processes—Coloring Department and Mixing Department. Michael assigned $385,000 to the 5,500 gallons of paint transferred from Mixing Department to Finished Goods Inventory. The journal entry to record completion of processing is:

A) Debit Work-in-Process Inventory—Mixing, $385,000; credit Finished Goods Inventory, $385,000.

B) Debit Finished Goods Inventory, $385,000; credit Cost of Goods Sold, $385,000.

C) Debit Cost of Goods Sold, $385,000; credit Finished Goods Inventory, $385,000.

D) Debit Finished Goods Inventory, $385,000; credit Work-in-Process Inventory—Mixing, $385,000.