When a manufacturing company uses direct materials, it assigns the cost by debiting O A. Direct...

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When a manufacturing company uses direct materials, it assigns the cost by debiting O A. Direct Materials. O B. Manufacturing

business accounting

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Answer 1

Answer #1

The correct answer is:

C. Work in progress Inventory.

Reason:

When an entity converts direct materials into WIP inventory, WIP inventory is created. It is an increase in asset, hence, it is debited.

Simultaneously, direct materials gets credited as it is decreased due to conversion to WIP.

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Answer 2

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