Materials Transaction
i. Purchase of Materials on Credit
ii. Return of Materials to Suppliers
iii. Purchase of Materials in Cash.
The above transactions affect both the cost accounts and financial accounts and the entries in the two sets of books will shows as given as:
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In the Financial Books
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In the Costing Books
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Purchases on Credit:
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Dr Purchases a/c
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Dr Stores Ledger Control a/c
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Cr Creditors a/c
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Cr General Ledger Adjustment a/c
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Return of Materials to Suppliers
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Dr Creditors
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Dr. General Ledger Adjustment a/c
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Cr. Purchases a/c
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Cr. Stores Ledger Control a/c
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Purchases of Materials in Cash
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Dr. Purchases a/c
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Dr. Stores Ledger Control a/c
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Cr. Cash a/c
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Cr. General Ledger Adjustment a/c
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The given entries of material transactions affect merely the cost books since they are simply transfers in the cost ledger.
Issue of Materials to Production
Dr. Work in Progress Ledger Control a/c
Cr. Stores Ledger Control a/c