Question

Gullett Corporation had $29,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $78,000 of raw materials. The journal entry to record the purchase of raw materials would include a:

Answer 1

Answer: Debit to Raw Materials of $78,000.

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Inventory is an asset. To increase the balance of an asset, you need to debit that asset account.

In this case, raw materials inventory is an asset. When you purchase raw materials, the total raw materials inventory balance on hand increases.

To increase the balance of raw materials inventory, you need to debit that raw materials inventory account.

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Date	Accounts and Explanation	Debit	Credit
	Raw materials inventory	$78,000
	Accounts payable		$78,000
	(To record purchase of raw materials)