Multiple Choice Questions:

1) Delaware Company purchased raw materials worth $5,000 on account. The journal entry to record purchase of raw materials on account is:

A) Debit Cash, $5,000; credit Raw Materials Inventory, $5,000.

B) Debit Accounts Payable, $5,000; credit Raw Materials Inventory, $5,000.

C) Debit Raw Materials Inventory, $5,000; credit Accounts Payable, $5,000.

D) Debit Raw Materials Inventory, $5,000; credit Cash, $5,000.

2) Nevada Manufacturing has two processing departments, Department I and Department II. The raw materials processed at Department I are sent to Department II for further processing. During June, direct materials worth $50,000 purchased on account were assigned to Department I. The journal entry to record issue of direct materials to production is:

A) Debit Work-in-Process Inventory—Department I, $50,000; credit Raw Materials Inventory, $50,000.

B) Debit Raw Materials Inventory, $50,000; credit Work-in-Process Inventory—Department I, $50,000.

C) Debit Work-in-Process Inventory—Department I, $50,000; credit Accounts Payable, $50,000.

D) Debit Accounts Payable, $50,000; credit Work-in-Process Inventory—Department I, $50,000.

3) Nevada Manufacturing has two processing departments, Department I and Department II. During 2014, direct materials worth $38,000 purchased on account were assigned to Department I. At the end of 2014, when the production cost report for Department 1 was prepared, Nevada assigned $46,000 to the units transferred from Department 1 to Department II. The journal entry to record the transfer of units to Department II will:

A) Debit Work-in-Process Inventory—Department II for $38,000 and credit Work-in-Process Inventory—Department I for $38,000.

B) Debit Work-in-Process Inventory—Department I for $46,000 and credit Work-in-Process Inventory—Department II for $46,000.

C) Debit Work-in-Process Inventory—Department I for $38,000 and credit Work-in-Process Inventory—Department II for $38,000.

D) Debit Work-in-Process Inventory—Department II for $46,000 and credit Work-in-Process Inventory—Department I for $46,000.

4) Factory rent and utilities are debited to the:

A) Concerned Work-in-Process Inventory account.

B) Manufacturing Overhead account.

C) Finished Goods Inventory account.

D) Cost of Goods Sold account.

5) Which of the following is recorded by debiting the Manufacturing Overhead account?

A) Transfer of units from one process to the next

B) Direct labor costs incurred

C) Depreciation on factory machinery

D) Office electricity charges