The entry to record the purchase of raw materials on account using a job costing system would include a:

Question

Quizplus · Accepted Answer

The purchase of raw materials on account would result in an increase in raw materials inventory. Therefore, the entry should include a debit to raw materials inventory. Accounts payable should also be credited to reflect the fact that the company owes money for the purchase. However, since the question specifically refers to a job costing system, the entry should not include a credit to work in process inventory until the raw materials are actually used in production of a specific job. Therefore, the answer choice that includes a debit to raw materials inventory (C) is the best option.

The Entry to Record the Purchase of Raw Materials on Account