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)Both A and C are correct

Question

Quizplus · Accepted Answer

If the company debited the Work-in-Process Inventory account for $67,000, it means that direct materials were added to the work-in-process during the period, which implies that they were deducted from Raw-Material Inventory. Therefore, option A is correct. Also, if all procedures were performed correctly, this means that the company was accounting for the usage of direct materials, so option C is correct. Therefore, both A and C options are correct, and the best choice is E. Option B is incorrect because there is no mention of Manufacturing Supplies Inventory in the question. Option D is incorrect because if indirect materials were used, the company would likely include them in the overhead costs instead of the work-in-process account.

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