Question

The journal entry to record the purchase of materials on account is to:

a- debit Accounts Payable and credit Production Materials
b- debit Raw Materials Inventory and credit Accounts Payable
c- debit Accounts Payable and credit Raw Materials Inventory
d- debit Production Materials and credit Accounts Payable

Answer 1

The correct journal entry for purchasing materials on account is to debit Raw Materials Inventory and credit Accounts Payable. This reflects an increase in assets (inventory) and an increase in liabilities (accounts payable). the correct answer is b

Step-by-step explanation:

The journal entry to record the purchase of materials on account would involve increasing the inventory and also increasing the accounts payable, since the materials are bought on credit. The correct entry is to debit Raw Materials Inventory and credit Accounts Payable.

This is because when purchasing materials, you are increasing your inventory of raw materials, which is an asset, and since the purchase is on account, you are also increasing your liabilities specifically Accounts Payable. Therefore, the correct answer is b- debit Raw Materials Inventory and credit Accounts Payable.