Under backflush costing approach,the purchase of materials is ________.
A) credited to the Materials and In-Process Inventory Control account
B) debited to the Materials and In-Process Inventory Control account
C) debited to the Materials Inventory Control account
D) credited to the Materials Inventory Control account

Question

Quizplus · Accepted Answer

Under backflush costing approach, the purchase of materials is debited to the Materials and In-Process Inventory Control account. This is because backflush costing defers material accounting until the end of the production process, when the actual usage of materials can be accurately determined. Therefore, the debits to the Materials and In-Process Inventory Control account represent the cost of the materials used in production, and credits will be made to this account when the finished goods are produced.

Under Backflush Costing Approach,the Purchase of Materials Is ________