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Direct materials costing $5,000 are requisitioned from the stockroom for a job. Which entry records this?
ADebit Materials and credit Work in Process
BDebit Factory Overhead and credit Materials
CDebit Work in Process and credit Wages Payable
DDebit Work in Process and credit Materials
Answer & Solution
Correct answer: D. Debit Work in Process and credit Materials
1. Requisitioning moves materials out of the stockroom and onto the production floor.
2. Work in Process is an asset account that is increasing, so it is debited for $5,000.
3. Materials is an asset account that is decreasing, so it is credited for $5,000.
4. Factory Overhead would be debited only for indirect materials that never become part of the product.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 2.1 Introduction_
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