ECONOMICS

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COST ACCOUNTING

PROCESS COSTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The direct materials costing RM4, 000 has been used in Mixing Department. The correct journal entry would be:
A
Dr. Raw materials inventoryCr. Work in process-Mixing Department
B
Dr. Work in process-Mixing Department Cr. Raw materials inventory
C
Dr. Finished goods Cr. Raw materials inventory
D
Dr. Mixing Department Cr. Raw materials inventory
Explanation: 

Detailed explanation-1: -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-2: -The journal entry to record the issuance of direct material into production includes: Answer: a) a credit to materials inventory. the issuance of direct material to production is a debit in work in process inventory and credit materials inventory.

Detailed explanation-3: -The journal entry to record the use of direct materials in process costing is to: debit Work in Process Inventory and credit Raw Materials Inventory. The journal entry to record direct labor used in process costing is a(n): Increase in assets and an increase in liabilities.

Detailed explanation-4: -Answer and Explanation: The cost of direct materials used in production is debited to (c) work in process.

There is 1 question to complete.
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