Answer: suggests that the firm's previous choices were not the best ones.
Explanation: For a long-tenured top-level manager to make such proclamation, shows the inefficiencies of the firm which he is a part of. He obviously has been with the firm for a very long time and making that proclamation will also be a dent in his image as a manager.
The criteria for distinguishing between whether an expenditure is a capital item or a deductible expense is the useful life of the item.
If the purchase is going to be used and no longer have value at the end of the reporting period it is an expense for that period. If the item is a capital item it is going to have a longer useful life. In this case the item is depreciated over its useful life, assigning an expense amount to each accounting period that the item has value.
Answer:
Debit : <em>Work In Process Account</em> and Credit : <em>Raw Materials Account</em>
Explanation:
The Work In Process Account must be increased with the cost of raw materials being transferred to production from the Raw Materials Account.Whilst the Raw Materials Account must be decreased.
