How Is the Cost of Indirect Materials Used in the Factory

question 27

Multiple Choice

How is the cost of indirect materials used in the factory recorded?

• A)Credit to Manufacturing Overhead account
• B)Credit to Raw Materials Inventory account
• C)Credit to Work-in-Process Inventory account
• D)Credit to Direct Materials Expense account

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Definitions:

Retained Earnings Statement

A financial report detailing the variations in retained profits over a definite time frame.

Depreciation Expense

The allocation of the cost of tangible assets over their useful lives as an expense to reflect their usage and wear and tear.

Stock Dividend

Additional shares are issued to shareholders by a corporation as a payment, rather than giving out cash.

Par Value Common Stock

The nominal or face value assigned to common stock shares in the corporation's charter, not necessarily reflecting their market value.