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

Question

Quizplus · Accepted Answer

When scrap attributable to a specific job is sold on account, the journal entry should reflect the increase in Accounts Receivable (since the sale is on account) and decrease the Work-in-Process Control account (to reflect the cost associated with the scrap that was produced and then sold). This is why option C is correct.

When the Amount of Scrap Is Material and the Scrap