Answer the Following Questions Using the Information Below:
Games R

question 2

Multiple Choice

Answer the following questions using the information below:
Games R Us manufactures various games. For March, there were no beginning inventories of direct materials and no beginning or ending work in process. Conversion costs is the only indirect manufacturing cost category currently used. Journal entries are recorded when materials are purchased and when conversion costs are allocated under backflush costing.
$\begin{array}{lr}\text { Conversion costs - March } & \$ 400,000 \\\text { Direct materials purchased - March } & \$ 1,070,000 \\\text { Units produced - March } & 58,800 \\\text { Units sold - March } & 41,800\end{array}$
-Which of the following journal entries properly records the purchase of direct materials?

• A)\(\begin{array} { l }
• \text {Accounts Payable Control }&\$1,070,000 \\
• \text { Inventory: Raw and In-Process Control}&\$1,070,000 \\
• \end{array}\)
• B)\(\begin{array} { l }
• \text {Inventory: Raw and In-Process Control }&\$1,070,000 \\
• \text {Accounts Pavable Control}&\$ 1,070,000\\
• \end{array}\)
• C)\(\begin{array} { l }
• \text {Inventory: Raw and In-Process Control }&\$1,070,000 \\
• \text {Conversion Costs }&\$1,070,000 \\
• \end{array}\)
• D)\(\begin{array} { l }
• \text { Conversion Costs}&\$1,070,000 \\
• \text { Inventory: Raw and In-Process Control}&\$1,070,000 \\
• \end{array}\)

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Definitions:

Uniform Electronic Transactions Act

A law adopted by many states in the U.S., which gives legal validity to electronic signatures and records in commercial transactions.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed to be enforceable.

Parol Evidence Rule

A legal principle in contract law that prevents parties from presenting extrinsic evidence of prior or contemporaneous negotiations to alter or contradict the terms of a written agreement.

Condition Precedent

refers to a condition or event that must occur before a contract becomes effective or before a party is obligated to perform their contractual duties.