CMA Intermediate · Cost Accounting · Integrated Accounting System
In an integrated accounting system, where cost and financial accounts are maintained in a single set of books, which account is debited when direct materials costing ₹40,000 are issued to production?
Work-in-Progress Control Account is debited, because direct materials issued to production become part of the cost of work in progress, while the Stores Ledger Control Account is credited for the same amount in the integrated system.
- AStores Ledger Control Account
- BWork-in-Progress Control AccountCorrect
- CCost of Sales Account
- DFactory Overhead Control Account
Explanation
Issue of direct materials to production is recorded as Work-in-Progress Control A/c Dr and Stores Ledger Control A/c Cr. Stores is credited, not debited. Cost of Sales and Overhead accounts are not affected by direct material issues.
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