The Entry to Record the Use of Direct Materials in Production

question 34

Multiple Choice

The entry to record the use of direct materials in production would include a

• A)debit to finished goods inventory.
• B)debit to raw materials inventory.
• C)debit to WIP inventory.
• D)credit to finished goods inventory.

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Definitions:

Credit Sales

Credit sales are transactions where the customer purchases goods or services on account, agreeing to pay the supplier at a later date.

Finished Goods Inventory

The stock of completed products that are ready to be sold by a company.

Raw Materials Inventory

The stock of basic materials that are used in the manufacturing process and are awaiting to be processed.

Cost of Goods Sold

The immediate expenses associated with manufacturing the products a company sells, comprising both materials and labor.