COST ACCOUNTING
JOB ORDER COSTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
sale of materials
|
|
|
return of materials
|
|
|
issuance of materials to the factory
|
|
|
finished goods
|
Detailed explanation-1: -Raw materials and accounting Raw materials are usually recorded on a balance sheet as an inventory asset. When recording raw materials, a debit is made to the raw materials inventory account, while a credit is made to the accounts payable account.
Detailed explanation-2: -A credit to the Raw Materials Inventory account represents: raw materials added to production.
Detailed explanation-3: -Accounting for Raw Materials Inventory Raw materials of all types are initially recorded into an inventory asset account with a debit to the raw materials inventory account and a credit to the accounts payable account.
Detailed explanation-4: –When materials are purchased they are recorded in the Raw materials inventory account.-Raw materials inventory only includes the cost of direct materials.-Direct labor costs flow through the Raw materials inventory account.-Raw materials inventory represents the cost of materials not yet used in production.