1. (a) Direct materials

(i) Dr Stores ledger control A/c Cr Cash A/c – for cash purchasers X

(ii) Dr Stores ledger control A/c Cr Creditors A/c – for credit purchasers X

(b) Return of materials to suppliers

Dr Cash A/c or creditors control A/c X

Cr Stores ledger control A/c X

(c) Issue of materials from the store

Dr – W.I.P. Control A/c X

Cr stores ledger control A/c for direct materials. X

Indirect materials: Dr Factory overheads control A/c X

Cr Stores ledger control A/c X

2. Direct Labor

Dr W.I.P. Control A/c

Cr Cash A/c

3. Accrued Direct Wages

Dr W.I.P. Control A/c

Cr Wages Control A/c

Indirect Wages

Dr Factory overheads control A/c

Cr Wages Control A/c

  1. Production Overheads

(i) (not yet paid) Dr Factory overhead control A/c

Cr Expenses/Creditor control A/c

(ii) (When paid) Dr Expense/creditors A/c

Cr Cash A/c


Overheads entries apply when there is an interlocking accounting system.

5. Finished goods transferred to the store:

Dr Finished goods stock control A/c

Cr W.I.P Control A/c

6. Sale delivery of finished goods to customers:

(i) On Credit: Dr Debtors control A/c Cr Sales A/c

(ii) In Cash: Dr Bank/Cash A/c Cr(Sales A/c

7. Cost of goods sold to customers:

Dr Cost of sales A/c

Cr Finished goods control A/c

8. (i) When there is over absorption of production overheads:

Dr Factory overheads control A/c

Cr P & L A/c

(ii) When there is under absorption of production overheads:

Dr P& L A/c

Cr Factory overheads control A/c

9. When there are non-manufacturing overheads:

Dr P & L A/c

Cr Non-manufacturing overheads control A/c or non-manufacturing overheads/expenses are regarded as period costs & are therefore not changed To W.I.P control A/c.

Job Cost Account

  Dr   Cr
Direct materials issued from stock X Materials returned to the store X
 Direct wages  X Materials transferred to other jobs  X
 Production overheads absorbed  X Cost of completed jobs transferred to finished goods A/c  X
Materials transferred from other jobs X Balance c/d (Total cost of that job) X
  XX   XX

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