A company purchases $40,000 of direct materials and $30,000 of indirect materials on account. the journal entry to record this transaction is debit to raw materials.
What is the appropriate journal entries in this case?
The direct and indirect materials have been bought on account such that the company owes accounts payable $70,000($40,000+$30,000) because they have an obligation to pay, in other words, the accounts payable would be credited.
Besides, the raw materials account, the receiving account would be debited with the same amount.
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