The purchase of raw materials on account in a process costing system is recorded with a:
A)Debit to Purchases and credit to Cash.
B)Debit to Purchases and a credit to Accounts Payable.
C)Debit to Raw Materials Inventory and a credit to Accounts Payable.
D)Debit to Accounts Payable and a credit to Raw Materials Inventory.
E)Debit to Work in Process Inventory and a credit to Accounts Payable.

Question

Quizplus · Accepted Answer

In a process costing system, the purchase of raw materials on account is recorded with a debit to Raw Materials Inventory and a credit to Accounts Payable. This is because the raw materials are initially held in inventory until they are used in the production process, and the obligation to pay for them is recorded in the accounts payable account.

The Purchase of Raw Materials on Account in a Process