Question

The journal entry to record direct labor used in process costing is a(n):___________

a. decrease in assets and a decrease in liabilities.
b. increase in assets and an increase in liabilities.
c. decrease in assets and a decrease in equity.
d. increase in assets and an increase in equity.

Answer 1

b. increase in assets and an increase in liabilities.

Step-by-step explanation:

The journal entry to record the direct labor cost used is shown below:

Work in process Dr

To wages payable

(Being the direct labor cost used is recorded)

Here the work in process is debited as it increased the assets and credited the wages payable as it also increased the liabilities