Andrew Industries purchased $165,000 of raw materials on account during the month of March.The beginning Raw Materials Inventory balance was $22,000,and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials.
-How should Andrews record the purchase of raw materials for March?
A)Debit Raw Materials Inventory $165,000; credit Accounts Payable $165,000
B)Debit Work in Process Inventory $165,000; credit Raw Materials Inventory $165,000
C)Debit Raw Materials Inventory $187,000; credit Cash $187,000
D)Debit Accounts Payable $165,000; credit Raw Materials Inventory $165,000
E)Debit Accounts Payable $187,000; credit Raw Materials Inventory $187,000

Question

Quizplus · Accepted Answer

The correct way to record the purchase of raw materials on account is to debit the Raw Materials Inventory for the amount purchased ($165,000) and credit Accounts Payable for the same amount. This reflects the increase in inventory and the corresponding liability to pay for it.

Andrew Industries Purchased $165,000 of Raw Materials on Account During