Final answer:
Entry (1) in the T-account for raw materials indicates the purchase of raw materials, which is shown as a debit (an increase in assets) in the account. A T-account is a tool used in accounting to represent debits and credits for transactions, essential for tracking financial data. This entry affects the company's inventory asset account but not time deposits, transaction costs, or the broader economic concept of the unit of account.
Step-by-step explanation:
The entry (1) in the T-account for raw materials represents the purchase of raw materials. This is indicated by a debit entry, increasing the raw materials account, which is an asset. When raw materials are purchased, they are not immediately expensed; instead, they are recorded as an asset because they provide future economic benefit. The use of raw materials would be recorded when they are actually consumed in the production process, which would decrease the raw materials account through a credit entry.
In accounting, a T-account is used to track the debit and credit entries for a particular ledger account. The shape resembles the letter 'T', where the left side of the T-account records debits and the right side records credits. It's important to note that for a bank, the T-account includes assets on one side and liabilities plus net worth on the other, emphasizing that assets will always equal liabilities plus net worth, establishing the fundamental accounting equation.
Transactions involving raw materials are part of a company's inventory management and affect both the balance sheet and, eventually, the income statement when the materials are used and become part of the cost of goods sold. This type of transaction does not directly deal with a time deposit, which is related to banking operations where the depositor earns a higher interest rate, nor with transaction costs, which are costs associated with finding a lender or borrower. The T-account does not directly relate to the unit of account, which is the measure of market values in an economy; however, it does use the monetary unit as the unit of account in recording transactions.