The journal entry to record the issuance of direct material into production includes:
A)a credit to Raw Materials Inventory.
B)a credit to Finished Goods Inventory.
C)a credit to Work in Process Inventory.
D)a credit to Cash.

Question

Quizplus · Accepted Answer

When direct materials are issued into production, the accounting entry involves a debit to Work in Process Inventory (to reflect the increase in production costs) and a credit to Raw Materials Inventory (to reflect the decrease in raw materials on hand). This means the correct answer is a credit to Raw Materials Inventory, as it accurately reflects the reduction in the inventory of materials that are now being used in production.

The Journal Entry to Record the Issuance of Direct Material