Accounting for Materials

Question 1

What are the JE’s for gross method of accounting for cash discounts?

Example: List Price is 40,000 ; 2/15 , n/30

Answer 1

Jan 1 Dr Materials 40000
Cr AP 40000
Jan 14 Dr AP 40000
Cr Cash 39200
Cr Materials 800
Jan 30 Dr AP 40000
Cr Cash 40000

Question 2

What are the JE’s for gross method of accounting for cash discounts?

Example: List Price is 40,000 ; 2/15 , n/30

Answer 2

Jan 1 Dr Materials 39200
Cr AP 39200
Jan 14 Dr AP 39200
Cr Cash 39200
Jan 30 Dr AP 39200
Dr Materials 800
Cr Cash 40000

Question 3

What is the two types of method in charging freight-in?

Answer 3

Direct Charging Method and Indirect Charging Method

Question 4

What is the JE for recording direct freight-in charging?

Answer 4

Dr Materials xx
Cr AP xx

Question 5

What is the JE for recording indirect freight-in charging?

Answer 5

Dr Materials
Dr FOH
Cr AP

Question 6

What is the JE for normal spoilage attributable to specific job?

Answer 6

Dr Spoiled Goods
Cr WIP

Question 7

What is the JE for normal spoilage attributable to specific job?

Answer 7

Dr Spoiled Goods
Cr WIP