material return is a common economic business in the daily operation of enterprises. For the material return business, raw material account and production cost account should be set up. How to make relevant accounting entries?

accounting entries for returning materials

If there are any unused raw materials in the workshop inventory at the end of the month, The following measures should be taken:

(1) If the materials continue to be used next month, they should be treated as "false return to the warehouse":

A. Return to the warehouse at the end of the month:

Borrow: raw materials

Loan: production cost-basic production cost-direct materials

B. Take out at the beginning of next month:

Borrow: production cost-direct materials. Return to warehouse:

Borrow: raw materials

Loan: production cost-basic production cost-direct materials

Accounting entry of materials returned by workshop

Some materials collected in the current month are returned, and entries are made in two ways:

The first method is red-ink write-off. The entry is:

Debit: production cost (manufacturing expenses, management expenses, etc.)

Loan: raw materials

The second method, reverse write-off method, the entry is:

Debit: raw materials

Loan: production cost (manufacturing expenses, management expenses, etc.)

What does production cost mean?

production cost refers to all production expenses incurred by production units for producing products or providing services, including all direct expenses and manufacturing expenses. Direct expenses include direct materials (raw materials, auxiliary materials, spare parts, fuel and power, etc.), direct wages (wages and subsidies for production personnel) and other direct expenses (such as welfare expenses); Manufacturing expenses refer to the expenses incurred by the branches and workshops in an enterprise for organizing and managing production, including the wages of the managers of the branches and workshops, depreciation expenses, maintenance expenses, repair expenses and other manufacturing expenses (office expenses, travel expenses, labor insurance expenses, etc.).

in order to calculate the production cost, a production cost account can be set up for accounting, and a basic production cost account and an auxiliary production cost account can be set up separately for accounting. Before the manufacturing expenses are included in the cost calculation object of each product, they should be accounted for in the manufacturing expense account first, and then distributed and included in the cost of each product according to certain standards.

the cost of finished products in the current period can be calculated by adding the production expenses in the current period to the cost of in-process products at the beginning and subtracting the cost of in-process products at the end.

WIP cost at the beginning+production expenses incurred in the current period = finished product cost in the current period+WIP cost at the end of the period.