Accounting Procedures for Jobs Completed and Products Sold: Journal entry for sales and Cost of goods sold of inventories very associated. During a month’s operations, the materials placed in process are accounted for through materials requisitions for the jobs, the labor in process is evidenced by time tickets, and the factory overhead is applied. The figures charged to the work in process account represent the total factory cost for a month’s operations.
Journal Entry For Sales On Credit
When finished products are delivered to credit customers, sales invoices are prepared. At that time a journal entry for sales is recorded as follows:
Accounts Receivable  88,000
Sales                                                88,000
Journal Entry For Sales At Cash
When finished products are delivered to customers at cash, sales invoices are prepared. At that time a journal entry for sales is recorded as follows:
Cash                  88,000
Sales                                                88,000
Journal Entry For Delivery of Finished Goods
Each delivery necessitates a debit to Cost of Goods Sold and a credit to Finished Goods, using the cost figures recorded on the ledger cards.
Cost of Goods Sold                    52,300
Finished Goods                                          52,300
Journal Entry For Receipt of Cash from Credit Customer
When cash is received from the credit customers, Journal Entry to record the transaction is-
Cash      Dr. 88000
Accounts Receivable  Cr. 88,000
Journal entry for Sales/COGS/Accounts Receivables is given as above.
When jobs are completed, cost sheets are moved from the in process category to a finished file. Completion of a job results in a debit to Finished Goods and a credit to Work-in Process. If the completed job is undertaken for the purpose of replenishing stock, quantity and cost are recorded on Finished Goods ledger cards which are the subsidiary record of the finished goods account. Sample Journal Entry to record finished goods is as follows:
Finished Goods ———-xxx
Work-in Process——————-xxx
Or, if a separate Work-in Process is used to accumulate each cost element, the journal entry will be as follows:
Finished Goods ———-xxx
Work-in Process[Materials]———-xxx
Work-in Process  [Labor]————-xxx
Work-in Process[Factory OH]——-xxx
In factories with departmentalized operations, separate work in process accounts may be maintained for each producing department, and accumulated costs may be transferred from one department to the next based on the sequential work flow; or costs may be accumulated yet not transferred to subsequent departments until the job or the work is completed.
