Question

A company that uses a job order costing system would make the following entry to record the flow of direct materials into production:

Answer 1

Answer:

debit Work in Process Inventory, credit Raw Materials Inventory.

Explanation:

For reasons of accounting principles, the physical inventory must have priority to that of the continuous method; since the first constitutes information of greater objectivity and can therefore serve as a reference point to determine if there are missing or surpluses in the inventories, which after being well purified, can be adjusted through the cost of sale account and the inventory account accordingly if the permanent inventory turns out to be greater than the physical one, the cost of sale account must be debited for the amount of the difference, while the inventory account will receive a credit for the same value.