- Knowledge Check Under each account name in the T-account, enter the letter(s) of the transactions on the correct side (debit or credit) of the affected account(s). For example, for direct materials used, enter \"a\" in the first cell on the credit (right) side of Raw Materials Inventory. Some cells will remain blank. a. Direct materials are used b. Indirect materials are used C. Direct labor is used d. Indirect labor is used e Manufacturing overhead is applied f. Completed jobs are recognized g. Cost of goods sold is recognized