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In a Material Stores Control Account, why ‘issues of indirect materials’ are posted on the Cr (credit) side of the this T account as ‘Overhead Control’ ?
Need an explanation!
Thank you.
When we buy materials, we credit cash (or payables) and debit materials.
If some of these materials become an indirect / overhead expense and are therefore transferred to overheads. To transfer them out of the materials account, credit materials and debit overheads.
I would not worry about it too much – there is very little (if any) testing of the entries in the exam, except in the case of process costing (and I go through the process costing entries in detail in my free lectures).
In future, if you want me to answer then you must post in the Ask the Tutor Forum. This forum is for students to help each other.
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