When waste products from processes are sold, the proceeds from the sale of both normal losses and abnormal losses are credited to the process account.

Question

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The proceeds from the sale of normal losses can be credited to the process account to reduce the cost of the process. However, proceeds from the sale of abnormal losses are usually credited to the Abnormal Loss Account, not directly to the Process Account, as abnormal losses are considered outside the normal operating efficiency of the process.

When Waste Products from Processes Are Sold, the Proceeds from the Sale