CIMA BA2 · Chapter 8 · Question 3 of 9
In an integrated accounting system, what entry records the issue of INDIRECT materials (such as cleaning materials) to the factory?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Debit Production overhead control account, Credit Materials control account
Explanation
Indirect materials cannot be traced to specific products, so they are treated as production overhead: debit production overhead control and credit materials control (inventory). The overhead is later absorbed into work in progress using the predetermined rate.
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