Question

A company that uses a job order costing system would make the following entry to record the flow of direct materials into production: Multiple Choice

a) debit Work in Process Inventory, credit Cost of Goods Sold.
b) debit Work in Process Inventory, credit Factory Overhead.
c) debit Finished Goods Inventory, credit Raw Materials Inventory.
d) debit Factory Overhead, credit Raw Materials Inventory.
e) debit Work in Process Inventory, credit Raw Materials Inventory.

Answer 1

A company that uses a job order costing system would make the following entry to record the flow of direct materials into production: debit Work in Process Inventory, credit Raw Materials Inventory.

Step-by-step explanation:

A company that uses a job order costing system would make the following entry to record the flow of direct materials into production:

Answer: e) debit Work in Process Inventory, credit Raw Materials Inventory.

In a job order costing system, direct materials used in production are recorded by debiting the Work in Process Inventory account and crediting the Raw Materials Inventory account. This entry reflects the transfer of raw materials from the inventory to the work in process stage of the production process.

For example, if a company is manufacturing a customized product for a specific customer, the cost of the direct materials used to produce that product would be recorded under the Work in Process Inventory account. This allows the company to track the direct materials costs associated with specific jobs or projects.