 In this presentation we will take a look at multiple choice questions related to the job cost system. First question. Entry to record the flow of direct materials into production. A. Debit work in process. Credit cash. B. Debit work in process. Credit raw materials inventory. C. Debit work in process. Credit accounts payable. D. Debit inventory. Credit raw materials. E. Debit finished goods inventory. Credit raw materials inventory. Let's go through this again using the process of elimination. Entry to record the flow of direct materials into production. Now if we compare these answers often we can use them and try to say okay what's similar between these types of answers and that can help us to narrow down on what the most likely answer will be. Support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. So for example the first three are debiting work in process and those are all the same so we would think well that's probably it could be wrong. Maybe they had three that are all the same and that's not the right answer but typically when they do that it's because that's a piece of the answer and D says it's a debit to inventory and E says a debit to finished goods inventory so these aren't similar even in amongst themselves. So I would think then just by that we can basically say that it's probably going to be A through C and just to double check I mean if we look at D debit inventory that's kind of a vague answer because when we're in a production process there's different kinds of inventory it's either materials or it's work in process or it's finished goods inventory debiting just inventory is not really an account I mean it's not really a detailed account doesn't tell us what the account actually is because there's three components of inventory and we're going to credit our raw materials which is possible right we did so but that's why it's not D I mean and again you could say D is correct technically you might say well we are debiting a type of inventory account it's going to be either work in process finished goods or raw materials but again you're probably going to lose that argument because this account is not is not really detailed enough to give us information and then E says debit finished goods inventory and credit raw materials inventory and we're not going to debit finished goods inventory because we're just putting the goods into production they're not finished yet because we haven't finished them yet so it's not going to be those two we're down to A B and C then A says direct debit work in process and credit cash so I'll keep that for now B says debit work in process credit raw materials inventory I'll keep that for now and C says debit work in process and credit accounts payable and that you know that sounds kind of an unwritten not quite right because it you know it's we're not going to just purchase it we that would be like we just purchased it with it like a credit card and we put it into work in process which may be the case for like a small company but usually it's going to go through the warehouse first we're gonna have to put it I mean if we're talking about a big company it's going to go through the warehouse in which we're usually thinking about and these types of problems so it's not going to be usually going directly into work in process and accounts payable we're first going to go through the inventory where we track the materials inventory so it's not C so let's go through this again entry to record the flow of direct materials into production is either a or b either debit work in process and credit cash or debit work in process and credit raw materials and again a and C notice are very similar here because that would be us putting it directly into the work in process at the time that we purchase the materials and again if it's for small company that might be what what is done if we're like a small like a contractor but for for larger company that makes inventory we're not going to do those so these two could actually eliminate each other most likely because they're the same except either we're paying cash we potted on credit it's not going to go directly into work in process as the point it's going to go instead into raw materials and then when we requisition the form we're going to debit work in process the account representing that we're starting the process of working and credit raw materials inventory the inventory account so these are two inventory accounts it's just going out of one the raw materials inventory and going into the other the work in process inventory so final answer entry to record the flow of direct materials into production is be debit work in process credit raw materials inventory next question a job order costing system records the cost of producing using a a job cost sheet be a calculator C inventory sheet D general ledger E first in first out ledger let's go through this again using the process of elimination a job order costing system records the cost of producing using a a job cost sheet sounds familiar we're gonna I mean sounds reasonable we're gonna use a job cross sheets in a job cost system to record the cost I'm gonna keep that for now the says a calculator and again yeah he's one of those questions you might say well technically I do use a calculator when I do this but probably not going to be a calculator so it's probably not going to be the most correct answer we're looking for here and then C says inventory sheet so an inventory sheet sounds kind of reasonable I'll keep that for now D says general ledger now the general ledger is going to track the costs but it's not going to do it I mean every account has a general ledger the general ledger is going to track by date not not really given us the the cost type information we want it's not going to be ordered it's not in the way that we want it to be ordered so it's not really the general ledger and then he says first in first out ledger and it's that first in first out is it is a system we use when we do the merchandising company we might use it in the materials section but it's not going to really track all the jobs that that would be maybe something we use in the warehouse when we track the materials because we have to use a cost flow assumption like first in first out last in first out or average but not for the for all the costs so we're left with a and see let's go through it again a job order costing system records the cost of producing using a either a job cost sheet or see inventory sheet now of the two it's going to be the job cost sheet now an inventory sheet you might say well that's kind of what a job cost sheet is right but but the term we're looking for is the job cost sheet in the job cost system that's what's going to be used in order to track the costs by job so final answer a job order costing system records the costs of producing using a a job cost sheet