When Raw Materials Are Used in Production and Are Recorded

question 146

Multiple Choice

When raw materials are used in production and are recorded in job cost system:

• A) Goods in Process is credited and Finished Goods is debited.
• B) Direct Material and Indirect Material are debited and Goods in Process is credited.
• C) Direct Material and Indirect Material are debited and Raw Materials Inventory is credited.
• D) Goods in Process is debited and Raw Materials Inventory is credited.
• E) Goods in Process and Factory Overhead are debited and Raw Materials Inventory is credited.

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Definitions:

Sum Certain

A specified amount agreed upon within a contract that is clear and not subject to change.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on-demand or at a set time.

Payable on Demand

A financial term indicating that a debt or other financial obligation is due for payment immediately or whenever the creditor requests it.

Time of Payment

The specific period or date by which payment for goods or services is due or expected.