Question

gullett corporation had $27,000 of raw materials on hand on november 1. during the month, the corporation purchased an additional $76,000 of raw materials. the journal entry to record the purchase of raw materials would include a:

Answer 1

The journal entry to record the purchase of raw materials includes a debit to the Raw Materials account and a credit to the Accounts Payable or Cash account.

Step-by-step explanation:

The journal entry to record the purchase of raw materials would include a debit to the Raw Materials account and a credit to the Accounts Payable or Cash account.

The debit to the Raw Materials account increases the inventory of raw materials, while the credit to the Accounts Payable account represents the liability to pay for the raw materials at a later date.

If the purchase was made with cash, then the credit would be to the Cash account instead.

For example, the journal entry might look like this:

Debit: Raw Materials for $76,000

Credit: Accounts Payable for $76,000 (or Cash for $76,000)