 Hello in this presentation we will define materials requisition. According to fundamental accounting principles wild 22nd edition the definition of materials requisition is source document production managers use to request materials for production used to assign material costs to specific jobs or overhead. 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. When considering the term materials requisition in this context we're thinking about a job cost system for a manufacturing company manufacturing company being one that produces inventory from raw materials to finished goods ultimately those finished goods then being sold and moved to cost of goods sold the expense account considering material requisition we're thinking about that raw materials portion at the front end of the production process where we purchase the raw materials then of course those raw materials are going to need to be transferred and moved to the production process when we call work in process as that happens the materials requisition form is a form used to track that process to help record that transfer between the raw materials we can imagine them in the corner in a warehouse raw materials moving from raw materials inventory to the work in process through the documentation through the form of the materials requisition in a similar way as recording something like sales is done through the form of say an invoice so the process would be something like this for a job cost system where we have multiple accounts representing the inventory broken out by how complete the inventory is including raw materials work in process factory overhead finished goods imagining the process of inventory starting at the raw materials point moving to work in process and or and finished goods and then ultimately moving to the i'm sorry starting at raw materials moving to work in process and factory overhead ultimately going to finish goods that inventory then ready for sale when sold it moving from finished goods to the expense account of cost of goods sold these accounts will be backed up like all accounts by general ledger accounts for example gl accounts general ledger accounts raw material finished goods work in process factory overhead those accounts in order by date of transaction totals in the general ledger accounts equaling totals on the trial balance for example raw materials inventory equaling 170 000 on the gl general ledger account also equaling 170 000 on the trial balance same is true for finished goods same for work in process as factory overhead but we also need to track this information by job because the as we move the inventory from say work in process to finish goods and then ultimately to the cost of goods sold when sold we need to know which costs to move in order to do that we're going to track them by job each job being applied the inventory components inventory components per job will include direct materials direct labor and the overhead we here are talking about a requisition form in relation to the materials so as materials move from this raw materials trial balance gl account to the work in process account and or to the overhead account we need a requisition form which will help us to determine which job job 14 15 or 16 in this case that material is then being moved to in order to track the costs related to that material to each job it is also possible that the materials requisition form is going from raw materials not to a particular job but to the factory overhead and that's usually the case when we're talking about small things like glue or staples or things like that where the tracking two particular jobs is not cost effective it costs too much for us to track small things two specific jobs more cost effective to just transfer it to the factory overhead and then ultimately apply that factory overhead along with everything else we put in factory overhead in some format to the jobs using some type of estimate