The Entry to Record the Use of Direct Materials in Production

question 121

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:

Allowance Method

An accounting technique used to estimate and account for doubtful accounts receivable.

Bad Debts

Accounts receivable that are considered uncollectible, representing a loss to the company.

Sales Tax Rate

The percentage of sales price that businesses must collect from customers and remit to governmental agencies as sales tax.

QuickBooks Lists

Features within QuickBooks software that organize data into manageable categories like vendors, customers, and inventory items for easy access and management.