When the Actual Price to Purchase a Raw Material on Account

question 40

Multiple Choice

When the actual price to purchase a raw material on account is less than its standard price, the journal entry would include:

• A)Credit to Raw Materials; Credit to Materials Price Variance
• B)Credit to Accounts Payable; Credit to Materials Price Variance
• C)Credit to Raw Materials; Debit to Materials Price Variance
• D)Credit to Accounts Payable; Debit to Materials Price Variance

Understand the significance of monitoring and managing days’ sales uncollected to assess liquidity and operational efficiency.

Explain the procedures for handling cash transactions and the importance of controls to prevent and detect errors or fraud.

Understand the concept and importance of the number of days' sales uncollected in managing accounts receivable.

Calculate the number of days' sales uncollected using the appropriate formula.