Suppose a joint process yields 3 main products and one by-product that has no sales value and is disposed of in the normal garbage. Which of the following is appropriate in accounting for the by-product?
A) Describe it in a footnote to the financial statements
B) Allocate a portion of the joint cost to the by-product and show the amount in a loss account on the income statement
C) Allocate a portion of the joint cost to the by-product and show the amount as a reduction of the processing costs of the main products
D) None of the above; no accounting treatment is necessary

Question

Quizplus · Accepted Answer

Since the by-product has no sales value and is disposed of, it does not require any accounting treatment.

Suppose a Joint Process Yields 3 Main Products and One