In a Process Cost Accounting System, the Entry to Record

question 41

True/False

In a process cost accounting system, the entry to record cost of materials assigned to a production department requires a debit to the Raw Materials Inventory account and a credit to the Goods in Process Inventory account for that department.

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Definitions:

Encumbrances Outstanding

Liens or claims against property or assets that are unresolved or have not been paid off, affecting an owner's ability to transfer a clear title.

Modified Accrual Basis

An accounting method that combines elements of the accrual basis and cash basis accounting, recognizing revenues when they are available and measurable, and expenses when incurred.

Purchase Orders

Official documents issued by a buyer committing to pay the seller for the supply of specific products or services at agreed prices and terms.

Expenditures

Funds spent by a business in the pursuit of profit and other business activities, including operating and capital expenses.