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.

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hailla delacruz · Accepted Answer

Final Answer : C, Explanation :  In a process costing system, raw materials are recorded with a debit to Raw Materials Inventory and a credit to Accounts Payable when purchased on account. Option A is incorrect because cash is not involved in this transaction. Option B is incorrect because Purchases is not credited when raw materials are acquired on an account. Option D is incorrect because when materials are purchased on account, the Accounts Payable account is debited and not credited. Option E is incorrect because Work in Process Inventory is debited only after the raw materials have been requisitioned and placed in the production process.

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