Pete's Plastic Products makes plastic toys. The injection molding machines leave behind plastic that can be ground up and used again in the next batch of production. The entry to record this in the ledger includes:

Question

Quizplus · Accepted Answer

The grinding up of the leftover plastic produced by injection molding machines means that these are partly processed raw materials that can be used in subsequent production processes. This translates to the recording of a debit to raw materials inventory. Similarly, the ground-up plastic is not a finished product yet, as it still needs to go through further stages of production. Thus, the appropriate account to credit is work in process inventory.

Pete's Plastic Products Makes Plastic Toys