If scrap can be traced to a specific job, revenue from the scrap is:
A) Debited to work in process
B) Debited to finished goods
C) Credited to work in process
D) Credited to finished goods

Question

Quizplus · Accepted Answer

Revenue from the scrap is credited to work in process because the scrap is a byproduct or residual material of the production process. It can be sold or reused, and the revenue generated by it is considered a reduction of the cost of producing the finished goods. Therefore, the credit for the scrap is applied to the work in process account, which represents the cost of producing the finished goods.

If Scrap Can Be Traced to a Specific Job, Revenue