Materials transaction, Cost Accounting

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Materials Transaction

i. Purchase of Materials on Credit

ii. Return of Materials to Suppliers

iii. Purchase of Materials in Cash.

The above transactions affect both the cost accounts and financial accounts and the entries in the two sets of books will shows as given as:

 In the Financial Books

 In the Costing Books

 Purchases on Credit:

 

                               Dr Purchases a/c

 Dr Stores Ledger Control a/c

                              Cr Creditors a/c

 Cr General Ledger Adjustment a/c

 Return of Materials to Suppliers

 

                               Dr Creditors

 Dr. General Ledger Adjustment a/c

                              Cr. Purchases a/c

 Cr. Stores Ledger Control a/c

 Purchases of Materials in Cash

 

                               Dr. Purchases a/c

 Dr. Stores Ledger Control a/c

                               Cr. Cash a/c

 Cr. General Ledger Adjustment a/c

The given entries of material transactions affect merely the cost books since they are simply transfers in the cost ledger.

Issue of Materials to Production

Dr. Work in Progress Ledger Control a/c

Cr. Stores Ledger Control a/c


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