Which of the following best describes the journal entry to record the purchase of materials on account in process cost accounting?

• A. Debit Work in Process Inventory; Credit Cash
• B. Debit Accounts Payable; Credit Raw Materials Inventory
• C. Debit Raw Materials Inventory; Credit Accounts Payable
• D. Debit Finished Goods Inventory; Credit Accounts Payable

Answer: (C)

Verified step by step guidance

1. Understand the context: In process cost accounting, when materials are purchased on account, it means the company is acquiring raw materials but has not yet paid for them. This transaction needs to be recorded in the journal.
2. Identify the accounts involved: The purchase of materials affects the 'Raw Materials Inventory' account (an asset account) and the 'Accounts Payable' account (a liability account).
3. Determine the nature of the transaction: Since the company is increasing its inventory of raw materials, the 'Raw Materials Inventory' account will be debited. Conversely, because the company owes money for the purchase, the 'Accounts Payable' account will be credited.
4. Write the journal entry: The journal entry for this transaction will be: Debit 'Raw Materials Inventory' and Credit 'Accounts Payable'. This reflects the increase in inventory and the obligation to pay for the materials.
5. Review the options provided: Compare the journal entry you determined with the options given in the problem. The correct answer is 'Debit Raw Materials Inventory; Credit Accounts Payable', as it accurately reflects the transaction.