In Accounting for Scrap, Which of the Following Statements Is

question 27

Multiple Choice

In accounting for scrap, which of the following statements is true?

• A) Normal scrap is accounted for separately from abnormal scrap.
• B) In accounting for scrap, there is no distinction between the scrap attributable to a specific job and scrap common to all jobs.
• C) Initial entries to scrap accounting records are most often made in dollar terms.
• D) Scrap records not only help measure efficiency, but also help keep track of scrap, and so reduce the chances of theft.

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Definitions:

Receivable from Factor

Funds to be received from a factor, a financial intermediary that purchases receivables from a company, providing it with immediate cash.

Factoring Expense

Costs associated with the process of selling accounts receivable to a third party to obtain immediate cash.

Financing Agreement

A legal contract between a borrower and a lender, outlining the terms for borrowing funds, including the interest rate, repayment schedule, and other conditions.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services that have been delivered but not yet paid for.