Oregonian Fisheries Inc.processes king salmon for various distributors.Two departments are involved - processing and packaging.Data relating to tons of king salmon processed in the processing department during June 2010 are provided below:
The journal entry to record requisitioned and used direct materials would include a credit to:
A)Work-in-Process Inventory.
B)Accrued Payroll.
C)Factory Overhead.
D)Materials Inventory.
E)Finished Goods Inventory.

Question

Oregonian Fisheries Inc.processes king salmon for various distributors.Two departments are involved - processing and packaging.Data relating to tons of king salmon processed in the processing department during June 2010 are provided below: 
The journal entry to record requisitioned and used direct materials would include a credit to:
A)Work-in-Process Inventory. 
B)Accrued Payroll. 
C)Factory Overhead. 
D)Materials Inventory. 
E)Finished Goods Inventory.

Quizplus · Accepted Answer

The journal entry to record requisitioned and used direct materials would include a credit to Materials Inventory since direct materials used in the production process are debited to Work-in-Process Inventory and credited to Materials Inventory. Accrued Payroll and Factory Overhead are not involved in this transaction, and Finished Goods Inventory is not affected until the completion of the production process.