Consider the following scenario for inventory item A:
1) Standard Cost $10 Purchase Order Line Price: $12, Purchase Order Line Quantity: 10
2) Receipt Routing: Direct Delivery
You created a receipt of 8 units for item A. Which option correctly describes the effect on different
accounts?
A.
Debit Material Account $80; Credit Inventory AP Accrual Account $96; Debit Invoice Price Variance
Account $16; No effect on Purchase Price Variance Account
B.
Debit Material Account $80; Credit Inventory AP Accrual Account $96; No effect on Invoice Price
Variance Account; Debit Purchase Price Variance Account $16
C.
Debit Material Account $80; Credit Inventory AP Accrual Account $80; No effect on Invoice Price
Variance Account; Debit Purchase Price Variance Account $16
D.
Credit Material Account $80; Debit Inventory AP Accrual Account $96; No effect on Invoice Price
Variance Account; Credit Purchase Price Variance Account $16
E.
Debit Material Account $96; Credit Inventory AP Accrual Account $96; No effect on Invoice Price
Variance Account; Credit Purchase Price Variance Account $16