If scrap, common to all jobs, is returned to the storeroom and the time between the scrap being inventoried and its disposal is quite lengthy, the journal entry is:

Question

Quizplus · Accepted Answer

The journal entry required is to record the scrap being returned to the storeroom and subsequent disposal. Therefore, we need to credit the inventory account (since the scrap is being returned to the storeroom) and debit a separate account to record the scrap disposal. Option D correctly records the credit to the inventory account and the debit to the scrap disposal account. The other options have incorrect entries or do not record the disposal of scrap.

If Scrap, Common to All Jobs, Is Returned to the Storeroom