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 in 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 BSc from Loughborough University.
