the journal entry to record the purchase of materials on account in process cost accounting is a debit Work in Process Inventory and credit Raw Materials Inventory.
Credit, which derives from the Latin verb credit, which means "one believes," is the trust that permits one party to give money or resources to another party, with the understanding that the second party will not immediately pay back the first party (thereby creating a debt), but will instead promise to pay back or return those resources (or other materials of equal value) at a later time. To put it another way, credit is a way to formalize reciprocity, make it enforceable by law, and extend it to a sizable number of unconnected persons.
The resources offered may take the form of money (such as the granting of a loan), commodities, or services (e.g. consumer credit). Any type of deferred payment is considered credit. Credit is given to a debtor by a creditor, sometimes referred to as a lender.
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