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An Example of Accounting for the Job Order Costing System

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Purchase raw materials.

On January 3, National Snow Globe purchased $50,000 worth of raw materials on account. You debit Raw materials inventory for $50,000 and credit Accounts payable for $50,000.

The debit to Raw materials inventory (a debit account) increases that account’s balance; the credit to Accounts payable (a credit account) increases that account’s balance.

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