Nelson Manufacturing has two processing departments, Department I and Department

Question

Nelson Manufacturing has two processing departments, Department I and Department II. The raw materials processed at Department I are sent to Department II for further processing. During June, direct materials worth $40,000 purchased on account were assigned to Department I. The journal entry to record direct materials used in production is O A. debit Work-in-Process Inventory-Departme $40,000, credit Raw Materials Inventory, $40,000 B. debit Raw Materials Inventory, $40,000, credit Work-in-Process Inventory-Department l, $40,000 C, debit Accounts Payable. $40,000, credit Work-in-Process Inventory-Department 1.540.000 O D. debit Work-in-Process Inventory-Department , S40,000; credit Accounts Payable, 540,000

Explanation / Answer

When raw material issued to production then we have to debit the work in process inventory and as raw material issued to production we have to credit the raw material inventory.

So correct entry is " A " i.e. debit Work in process inventory $40000; credit Raw material inventory $40000

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