Question

Match the following activities to their effect on the general ledger accounts.

a. Allocate overhead costs to jobs
b. Pay factory utilities
c. Purchase indirect materials
d. Use indirect materials
e. Direct labor used

1. Credit Factory Overhead
2. Debit Factory Overhead
3. Debit Work in Process Inventory
4. Credit Raw Materials Inventory
5. Debit Raw Materials Inventory

Answer 1

a. Allocate overhead costs to jobs - Credit Factory overhead

Work-in process inventory Dr xxxx

Factory overhead Cr xxxx

b. Pay factory utilities - Debit Factory overhead

Factory overhead Dr xxxx

Utilities payable Cr xxxx

c. Purchase indirect materials - Debit Raw material inventory

Raw material inventory Dr xxxx

Accounts payable Cr xxxx

d. Use indirect materials - Credit Raw materials Inventory

Factory overhead Dr xxxx

Raw material inventory Cr xxxx

e. Direct labor used - Debit Work in process inventory

Work-in process inventory Dr xxxx

Wages payable Cr xxxx