When a job is completed in a service organization, the job costs are transferred to the

A) work in process account
B) cost of services account
C) finished goods account
D) cost of goods sold account

Question

When a job is completed in a service organization, the job costs are transferred to theA) work in process accountB) cost of services accountC) finished goods accountD) cost of goods sold account

gabrielle ottey · Accepted Answer

Final Answer : B, Explanation :  In a service organization, there are no finished goods or work in process accounts as there is no physical product being produced. Therefore, the job costs are transferred directly to the cost of services account, which represents the cost of providing the service to the customer. The cost of goods sold account is used in a manufacturing or retail organization, where there are physical goods being sold to customers.

When a job is completed in a service organization, the job costs are transferred to the

A) work in process account
B) cost of services account
C) finished goods account
D) cost of goods sold account

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