Question :
Objective 18.7
1) When the amount of scrap immaterial, which of : 1211908
Objective 18.7
1) When the amount of scrap is immaterial, which of the following is the easiest accounting entry when recording scrap sold for cash?
A) Sales of Scrap
Cash
B) Manufacturing Overhead Control
Cash
C) Cash
Scrap Revenues
D) Sales of scrap
Accounts Receivable
2) In accounting for scrap, which of the following statements is true?
A) Normal scrap is accounted for separately from abnormal scrap.
B) In accounting for scrap, there is no distinction between the scrap attributable to a specific job and scrap common to all jobs.
C) Initial entries to scrap accounting records are most often made in dollar terms.
D) Scrap records not only help measure efficiency, but also help keep track of scrap, and so reduce the chances of theft.
3) When the amount of scrap is material and the scrap is sold immediately after it is produced, which of the following is the journal entry if the scrap attributable to a specific job is sold on account?
A) Scrap Revenues
Accounts Payable
B) Work-in-Process Control
Accounts Receivable
C) Accounts Receivable
Work-in-Process Control
D) Work-in-Process Control
Accounts Payable
4) If scrap, common to all jobs, is returned to the storeroom and the time between the scrap being inventoried and its disposal is quite lengthy, the journal entry is ________.
A) Accounts Receivable
Materials Control
B) Materials Control
Work-in-Process Control
C) Work-in-Process Control
Materials Control
D) Materials Control
Manufacturing Overhead Control
5) If scrap is reused as direct material rather than sold as scrap ________.
A) Accounts Receivable is debited at its estimated net realizable value and then credited when the scrap is reused
B) Materials Control is debited at its estimated net realizable value and then credited when the scrap is
reused
C) Manufacturing Overhead Control is debited at its estimated net realizable value and then credited when the scrap is reused
D) Work-in-Process Control is debited at its estimated net realizable value and then credited when the scrap is reused
6) Which of the following statements is true of scrap?
A) When a production process yields two or more products with high total sales values relative to the total sales values of other products, those are called scrap.
B) For accounting purpose, distinction is made between normal and abnormal scrap.
C) Scrap refers to units of production, fully or partially completed, that do not meet the specifications required by customers for good units and are discarded or sold at reduced prices
D) Scrap is either sold or disposed of quickly or it is stored for later sale, disposal, or reuse.
7) Scrap is usually divided between normal and abnormal scrap.
8) If scrap is returned to the company’s storeroom and inventoried, it should NOT have any value in the accounting records.
9) When the dollar amount of scrap is immaterial, the simplest accounting is to record the physical quantity of scrap returned to the storeroom and to regard scrap sales as a separate line item in the income statement.
10) Costs are assigned to scrap only if it is abnormal scrap.
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