A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the Materials account to:
A) Work-in-Process and Cost of Goods Sold.
B) Work-in-Process and Factory Overhead.
C) Finished Goods and Cost of Goods Sold.
D) Work-in-Process and Finished Goods.

Question

Quizplus · Accepted Answer

The cost of materials is initially recorded in the Materials account, but when materials are requisitioned for use in production, the cost must be transferred to the appropriate production accounts. The transfer is typically made to both the Work-in-Process and Factory Overhead accounts, as both of these accounts are used to track the cost of producing a product. The choice of A is incorrect because Cost of Goods Sold is not directly involved in the production process, but rather reflects the cost of goods that have been sold. The choice of C is incorrect because Finished Goods is used to track the cost of completed products that have not yet been sold, but it is not involved in the production process. The choice of D is incorrect because Finished Goods is not involved in the initial production of goods, but rather reflects the cost of completed products.

A Summary of the Materials Requisitions Completed During a Period