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In accumulating raw materials costs, companies debit the cost of raw materials purchased in a perpetual system to:

a) Raw Materials Purchases.

b) Raw Materials Inventory.

c) Purchases.

d) Work in Process.

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Question added by Deleted user
Date Posted: 2015/12/10
Islam Refaat
by Islam Refaat , Director of Finance , SHIFT inc (Sila Development Company Limited)

Since you are using Perpetual system it will be debited to Raw Materials Inventory

Jiju Oommen
by Jiju Oommen , ERP Software Consultant , Simplex IT Solutions

b) Raw Materials Inventory.

manseer muhammed ali
by manseer muhammed ali , Accountant General , Royal Lighting L.L.C & Royal Furnishing LLC

option b. Raw Materials Inventory should be debited

Deleted user
by Deleted user

When placing the order and make the deposit (payment in advance) then you should debit the cost to Raw Materials Purchase

When the items reaching your warehouse your software should automatically move this ammount to "Raw Materials Inventory"

This is from Supply Chain point of view.

 

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