The cost of direct materials purchased on account is expensed at the time the:
A) goods made in the manufacturing process are sold.
B) cash is paid to settle the associated accounts payable.
C) manufacturing process is complete.
D) materials are purchased.

Question

Quizplus · Accepted Answer

The cost of direct materials purchased on account is expensed (recognized as Cost of Goods Sold) when the goods made in the manufacturing process are sold, aligning with the matching principle in accounting.

The Cost of Direct Materials Purchased on Account Is Expensed