38.The journal entry to record the issuance of direct material into production i

Question

38.The journal entry to record the issuance of direct material into production includes
A.a credit to materials inventory.
B.a credit to finished goods.
C.a credit to work in process.
D.a credit to cash.

39.The journal entry to record the purchase of direct materials for cash includes
A.a credit to materials inventory.
B.a credit to finished goods.
C.a credit to work in process.
D.a credit to cash.

40.The journal entry to record the sale of goods includes
A.a credit to conversion costs.
B.a credit to work in process.
C.a credit to finished goods.
D.a credit to cost of goods sold

41.The journal entry to record the completion of goods includes
A.a credit to conversion costs.
B.a credit to work in process.
C.a credit to finished goods.
D.a credit to cost of goods sold

42.Prime costs are defined as
A.manufacturing costs plus non-manufacturing costs.
B.direct labor plus direct materials.
C.variable costs equal fixed costs.
D.manufacturing overhead plus direct labor

Explanation / Answer

38.The Journal entry to record the issuance of direct materials into production

credit        material inventory

this is because when once material is issued from stores to production,the material inventory; material inventory being a debit item will get reduced and there-by we have to credit material inventory on consumption.

39.The journal entry to record the purchase of direct materials for cash includes

credit cash

This is be cause once we purchase direct materials, the inventory is uploaded with the purchase amount and cash goes out for the value of purchase. When cash goes out the real account comes into picture and thereby cash is being credited since it goes out of the treasury.

40. The journal entry to record the sale of goods includes

credit to cost of goods sold

This is because once sales takes place , inventory is reduced and therefore on valuing the inventory that has gone out, the cost of goods sold will be credited to calculate the gross profit

41. The journal entry to record the completion of goods includes

credit to work-in-process

This is because once material is issued to production, work-in-process is debited and on completion of production,

work-in-process is credited.

42. Prime costs are defined as

direct labor plus direct materials.

This is because labor and materials are the primary cost relating to production.

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