When factory payroll costs for labor are allocated in a job cost accounting system:
A) Factory Payroll is debited and Goods in Process Inventory is credited.
B) Goods in Process Inventory and Factory Overhead are debited and Factory Payroll is credited.
C) Cost of Goods Manufactured is debited and Direct Labor is credited.
D) Direct Labor and Indirect Labor are debited and Factory Payroll is credited.
E) Goods in Process Inventory is debited and Factory Payroll is credited.

Question

Quizplus · Accepted Answer

In a job cost accounting system, when factory payroll costs for labor are allocated, the Goods in Process Inventory and Factory Overhead accounts are debited to reflect the costs being applied to jobs and overhead, while the Factory Payroll account is credited to show the reduction in payroll liability.

When Factory Payroll Costs for Labor Are Allocated in a Job