The Journal Entry to Record the Purchase of Direct Materials

question 66

Multiple Choice

The journal entry to record the purchase of direct materials for Aztec Bromac is:

• A) \[\begin{array} { l l }
• \text { Dr Direct Materials Inventory } & \$ 30,000 \\
• \text { Dr Direct Materials Price Variance } & \$ 1,000\\\text { Cr Accounts Payable }&\$31,000
• \end{array}\]
• B) \[\begin{array} { c c c }
• \text { Dr Direct Materials Inventory } & \$ 30,000 & \\
• \text { Cr Direct Materials Price Variance } & \$ 1,000 \\
• \text { Cr Accounts Payable } & \$ 29,000
• \end{array}\]
• C) \(\begin{array}{ll}
• \text { Dr Direct Materials Inventory }&\$29,000 \\
• \text { \( \mathrm{Cr} \) Direct Materials Price Variance}&\$ 1,000\\
• \text {Cr Accounts Payable }&\$ 30,000\\
• \end{array}\)
• D) \(\begin{array}{ll}
• \text { Dr Direct Materials Inventory } & \$ 26,100 \\
• \text { Cr Direct Materials Price Variance } & \$ 2,900\\
• \text { Cr Accounts Payable }&\$29,000
• \end{array}\)

Apply contribution format income statements to decision-making scenarios.

Understand the relationship between sales volume, fixed expenses, and profitability.

Assess the financial implications of changes in production costs and selling price on business operations.

Identify key figures and their roles in the development and enforcement of the Hollywood Production Code.

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Definitions:

Seller

An individual or entity that offers goods or services in exchange for payment.

Financial Statement

Publications detailing a corporation's financial health, encapsulating the balance sheet, income statement, and cash flow statement.

Normal Balance

The side of an account (debit or credit) where increases are recorded, depending on the account type (asset, liability, equity, revenue, expense).

Temporary/Permanent

In accounting, this distinction categorizes accounts based on their persistence; temporary accounts reset each cycle, while permanent accounts carry their end balance into the next period.