Part 4 (Accounting for Materials) Flashcards
In manufacturing enterprises, the common practice is to record all materials and supplies in _______________________?
one control account, Materials or Stores
Procedures that affect the materials account involve the:
- Purchase of materials and supplies.
- Issuance of materials and supplies.
a. Direct materials
b. Indirect materials and supplies
The account debited when materials are purchased is ____________ (instead of Purchases for periodic) and the account credited is ____________?.
Materials or Stores (raw materials)
Accounts Payable or Vouchers Payable
As materials are purchased, the amount is posted on the __________________ and at the same time the purchase is also entered on an ____________________ (a separate card is used for each material item) showing quantity received, unit cost, and total amount.
(Raw M.) Material control account
individual materials ledger card/stockcard
When a job is started, the materials needed for the job are issued based on the __________________ prepared by the employees.
materials requisitions
A copy of the _________ is given to the storekeeper, which will serve as the basis for the materials to be issued.
requisition
is shown on the materials requisition together with the specifics on type and quantity of materials required by each job.
job order number
The quantity, unit cost, and total cost of each of the materials are entered on the _____________ of the stock card.
issued section
The entry to record the issuance of direct materials is
Debit: WIP
Credit: RM (Materials)
An entry is made on the stock card under the Issued section and also on the cost sheet - Materials.
The entry to record the issuance of indirect materials is
Dr: Factory overhead control
Cr: RM (Materials)
An entry is made on the stock card under the Issued section and also on the overhead analysis sheet.
In summary, Materials Control Account in Dr includes
- Inventory beginning
- Purchase of materials
- Freight-in (using direct
Charging) - Cost of excess materials
Returned from factory
In summary, Materials Control Account in Cr includes
- Cost of direct materials issued
- Cost of indirect materials issued.
- Cost of materials returned to suppliers
The balance of the Materials account represents the ____________________ under consideration.
Materials inventory at the end of the period
The balance amount of the materials account should be equal to the total of the balances of all the _________________?
material stock cards.
