Accounting entries - Interview question

Anil (1638 Points)

04 October 2010  

I attended an interview recently and the following question was asked:

 

What entry is passed when the raw material is purchased?

 

I told him on receipt of material the following entry is passed:

 

Purchases A/c ....................Dr.

Selling Party.........................................................Cr

 

I was asked what entries are passed before receipt of materials. I did not know the answer for this question. The company to which I had applied have ERP package for accounting.  Please anyone let me know what accounting entries are normally passed before receipt of purchased raw materials.

 

Thanks