Under a backflush costing system, the journal entry to purchase raw materials on account is:

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Quizplus · Accepted Answer

Under backflush costing, raw materials are not immediately recorded as an expense when purchased, but rather when they are used in the production process. Therefore, the journal entry to purchase raw materials on account would be to debit both the raw materials inventory and in-process inventory accounts and credit accounts payable. This reflects the fact that the cost of the raw materials is not immediately expensed, but is instead being recorded as an asset until it is consumed in production.

Under a Backflush Costing System, the Journal Entry to Purchase