Question

When materials are purchased, which of the following accounts is debited?

1) Raw materials inventory
2) Work in process inventory
3) Finished goods inventory
4) Cost of goods sold

Answer 1

The account debited when materials are purchased is the Raw materials inventory, reflecting the addition of assets to the company's stock.

Step-by-step explanation:

When materials are purchased, the account that is typically debited is the Raw materials inventory. This is because the purchase signifies that raw materials are being added to the company's inventory, which is an asset. As the materials are moved through the production process, they may be transferred to the Work in process inventory and eventually to the Finished goods inventory once the manufacturing process is complete. Finally, Cost of goods sold is recorded when the company sells the finished goods. The inventory levels fluctuate based on business performance and consumer demand.