How to write the accounting entries for purchasing raw materials?

In the course of operation, the economic business of purchasing materials usually occurs in production enterprises. How to deal with the accounting entries of purchased materials?

Accounting entries for purchasing raw materials:

1. Raw material procurement:

Borrow: material procurement

Credit: accounts payable

2. After receiving the invoice, the materials will be put into storage:

Borrow: raw materials

Material cost variance (actual cost is greater than planned cost, otherwise it will be credited)

Taxes payable-VAT payable (input tax)

Loan: material procurement

3. Difference in material cost allocation at the end of the month:

Borrow: production cost

Credit: material cost variance (credit variance is shared by debits)

What is the production cost?

Production cost refers to the cost of production activities, that is, the expenses incurred by enterprises in producing products. Production cost is the monetary expression of the utilization rate of various resources in the production process, and it is an important index to measure the technical and management level of enterprises. Including direct material costs, other direct costs and indirect costs transferred from distribution; The lender will transfer the manufacturing cost registration of finished products to the "inventory goods" account. The final debit balance represents the unfinished product cost in the production process, that is, the final product cost. This course should set up a subsidiary ledger according to the product variety.

What's the difference in material cost?

The material cost variance account is used to calculate the difference between the actual cost and the planned cost of various materials in an enterprise, debit the difference (overrun) that the actual cost is greater than the planned cost, save the difference that the issued materials should bear, and adjust the reduced planned cost when adjusting the planned cost of the inventory materials. The lender registers the difference (savings) between the actual cost and the planned cost, and the difference between the cost overruns that should be borne by the issued materials. When adjusting the planned cost of the inventory materials, adjust the increased planned cost. Use red words sparingly and blue words excessively. "Material cost variance" is the difference between the debit's registered cost overrun, the issued material savings, the credit's registered savings and the issued material cost overrun.

Material cost variance refers to the difference between the actual cost and the planned cost of materials. The actual cost is greater than the planned price, and the cost overruns; The actual cost is lower than the planned price. The material cost difference of purchased materials reflects the quality of material purchasing business to some extent.