A review of Juicy Corporation'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 debit to the Raw-Material Inventory account.
B)also recorded a credit to Manufacturing Supplies Inventory.
C)was accounting for the usage of Manufacturing Supplies Inventory.
D)was accounting for the usage of indirect materials.
E)was accounting for the usage of direct materials by also crediting the Raw-Material Inventory account.

Question

Quizplus · Accepted Answer

When materials are used in the production process, they are transferred from Raw-Material Inventory to Work-in-Process Inventory. This transfer is recorded as a debit to Work-in-Process Inventory for the cost of the materials used (in this case, $67,000). To recognize the reduction in the Raw-Material Inventory account, a credit entry is also made to Raw-Material Inventory. Therefore, the best choice is E, which states that the firm also recorded a credit to Raw-Material Inventory account. The other options are not applicable in this scenario.

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