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.

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When the dollar amount of scrap is immaterial, it is common to record only the physical quantity of scrap returned to the storeroom and to treat scrap sales as a separate line item in the income statement. This simplifies the accounting process and reduces costs.

When the Dollar Amount of Scrap Is Immaterial, the Simplest