ECONOMICS

Detailed explanation-1: -Answer and Explanation: The statement is TRUE. The work-in-process inventory account is debited with the direct materials and direct labor costs incurred in the factory as well as the overhead costs applied to the goods being manufactured.

Detailed explanation-2: -The statement is FALSE. The work-in-process inventory account is debited when materials are requisitioned for a job, not when materials are purchased.

Detailed explanation-3: -To reflect this, raw material inventory will be credited and work in progress will be debited. Therefore, (D) Debit work-in-progress; credit raw materials inventory is the correct answer.

Detailed explanation-4: -Requisitioning Materials The journal entry for direct materials, that is, materials that can be directly traced to products, is a debit to the work in process and a credit to the raw materials inventory accounts.

Detailed explanation-5: -When raw materials are requisitioned for a job, the Raw Materials Inventory account is debited. Work-in-Process Inventory is debited when indirect labor costs are incurred in a job order costing system. When direct materials are received on the production floor, they are recorded on the job cost record.