When Raw Materials Are Purchased on Account for Use in a Process

question 42

Multiple Choice

When raw materials are purchased on account for use in a process costing system,the corresponding journal entry that should be recorded will include:

• A)A debit to Work in Process Inventory.
• B)A debit to Accounts Payable.
• C)A credit to Cash.
• D)A debit to Raw Materials Inventory.
• E)A credit to Raw Materials Inventory.

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Definitions:

Simple Rate

A term that could refer to a basic or straightforward interest rate, without compounding effects.

Revenues

The total income generated by a company from its business activities, such as sales of goods or services.

Depreciates

The process through which the value of an asset decreases over time, typically due to wear and tear or obsolescence.

Payback Period

The amount of time it takes for an investment to generate cash flows sufficient to recover its initial cost.