=+Duke: That’s a very unusual way to record our factory wages and depreciation for the month.

Jack: What do you mean? This is exactly the way we were taught to record wages and depreciation in school. You know, debit an expense and credit Cash or payables, or in the case of depreciation, credit Accumulated Depreciation.

Duke: Well, it’s not the credits I’m concerned about. It’s the debits—I don’t think you’ve recorded the debits correctly. I wouldn’t mind if you were recording the administrative wages or office equipment depreciation this way, but I’ve got real questions about recording factory wages and factory machinery depreciation this way.

Jack: Now I’m really confused. You mean this is correct for administrative costs, but not for factory costs? Well, what am I supposed to do—and why?