The journal entry to record the purchase of materials on account is to:Multiple choice question.debit Accounts Payable and credit Raw Materials Inventorydebit Accounts Payable and credit Production Materialsdebit Production Materials and credit Accounts Payabledebit Raw Materials Inventory and credit Accounts Payable
Question
The journal entry to record the purchase of materials on account is to:Multiple choice question.debit Accounts Payable and credit Raw Materials Inventorydebit Accounts Payable and credit Production Materialsdebit Production Materials and credit Accounts Payabledebit Raw Materials Inventory and credit Accounts Payable
Solution
The correct answer is: debit Raw Materials Inventory and credit Accounts Payable.
Here's the step by step explanation:
-
When a company purchases materials on account, it means that the company has received the materials but will pay for them at a later date.
-
The materials received are added to the company's inventory. In accounting terms, this is recorded as a debit (increase) to the Raw Materials Inventory account.
-
At the same time, the company now has a liability because it owes money for the materials. This is recorded as a credit (increase) to the Accounts Payable account.
So, the journal entry to record this transaction is to debit Raw Materials Inventory and credit Accounts Payable.
Similar Questions
The journal entry to record the purchase of materials on account is a(n):Multiple choice question.decrease in assets and a decrease in liabilitiesincrease in assets and an increase in liabilitiesincrease in assets and a decrease in liabilitiesincrease in one asset and a decrease in another
When you buy raw materials, and record the purchase of those materials, this entry is a ________________ to raw materials inventory, and a ____________________ to cash or accounts payable. 1 pointCredit, Debit Notes Payable, EquipmentEquipment, Notes PayableDebit, Credit
Which of the following is a correct journal entry for the purchase of inventory on credit?Question 2Answera.Debit Accounts Payable, Credit Inventoryb.Debit Cash, Credit Inventoryc.Debit Inventory, Credit Accounts Payabled.Debit Inventory, Credit Cash
Multiple Choice QuestionThe journal entry to record indirect materials in production is to:Multiple choice question.debit Factory Overhead and credit Raw Materials Inventorydebit Work in Process Inventory and credit Factory Overheaddebit Raw Materials Inventory and credit Work in Process Inventorydebit Work in Process Inventory and credit Raw Materials Inventory
In the perpetual inventory system, what is the journal entry to record the payment of accounts payable for inventory purchases?Question 9Answera.Debit Cash, Credit Inventoryb.Debit Cash, Credit Accounts Payablec.Debit Inventory, Credit Cashd.Debit Accounts Payable, Credit Cash
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.