The cost of production summary for Maha Industries follows: What is the journal entry to record materials issued into production?
A)Finished goods 8,000 Materials 8,000
B)Work-in-process 8,000 Materials 8,000
C)Work-in-process 1,000 Materials 1,000
D)Materials 8,000 Accounts payable 8,000

Question

The cost of production summary for Maha Industries follows:  What is the journal entry to record materials issued into production?
A)Finished goods 8,000 Materials 8,000 ​ 
B)Work-in-process 8,000 Materials 8,000 ​ 
C)Work-in-process 1,000 Materials 1,000 ​ 
D)Materials 8,000 Accounts payable 8,000

Quizplus · Accepted Answer

When materials are issued into production, they are added to the work-in-process inventory account. Therefore, the journal entry would be a debit to Work-in-Process and a credit to Materials. Option A is incorrect because it accounts for finished goods instead of work-in-process. Option C is incorrect because it is only recording a small amount of the materials issued, and Option D is incorrect because it is recording a liability (accounts payable) rather than the actual materials issed.

The Cost of Production Summary for Maha Industries Follows