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Job Cost Accounting Journal Entries
The job cost accounting journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of job costing.
The journal entries follow the job costing process from purchase of raw materials, allocation of direct materials, direct labor, and manufacturing overhead to work in process, transfer of the goods through to finished goods and finally to cost of goods sold and sales.
In each case the job cost accounting journal entries show the debit and credit account together with a brief narrative. For a fuller explanation of journal entries, view our examples section.
Typical Job Cost Accounting Journal Entries
To purchase raw materials
Account
Debit
Credit
Raw materials inventory
XXX
Accounts payable
XXX
To accrued labor cost
Account
Debit
Credit
Labor cost
XXX
Wages payable
XXX
To transfer indirect materials, indirect labor and other overhead to manufacturing overhead account
Account
Debit
Credit
Manufacturing overhead
XXX
Raw materials (indirect)
XXX
Labor cost (indirect)
XXX
Depreciation
XXX
Utilities
XXX
Other costs
XXX
To transfer direct materials, direct labor, and manufacturing overhead (at the predetermined rate) to work in process
Account
Debit
Credit
Work in process inventory
XXX
Raw materials inventory
XXX
Direct labor cost
XXX
Manufacturing overhead
XXX
To transfer work in process to finished goods
Account
Debit
Credit
Finished goods inventory
XXX
Work in process inventory
XXX
To transfer finished goods to cost of goods sold
Account
Debit
Credit
Cost of goods sold
XXX
Finished goods
XXX
To record the sale of the goods
Account
Debit
Credit
Accounts receivable
XXX
Sales
XXX
Last modified January 13th, 2020 by Michael Brown
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.
