A review of a company's Work-in-Process Inventory account found a debit for materials of $67,000. If all procedures were performed in the correct manner, this means that the firm:
A) also recorded a credit to Raw-Material Inventory.
B) also recorded a credit to Manufacturing Supplies Inventory.
C) was accounting for the usage of direct materials.
D) was accounting for the usage of indirect materials.
E) also recorded a credit to Raw-Material Inventory and was accounting for the usage of direct materials.

Question

Quizplus · Accepted Answer

When a company debits the Work-in-Process Inventory for materials, it indicates that direct materials have been moved from the Raw-Material Inventory to the production process. Therefore, the corresponding credit would be to the Raw-Material Inventory, reflecting the decrease in raw materials, and it shows the accounting for the usage of direct materials in production.

A Review of a Company's Work-In-Process Inventory Account Found a Debit