Assume the Amount of Scrap Is Material and the Scrap

question 101

Multiple Choice

Assume the amount of scrap is material and the scrap is sold immediately after it is produced. If the scrap attributable to a specific job is sold on account, the journal entry is:

• A)Work-in-Process Control
• B)Work-in-Process Control
• C)Accounts Receivable
• D)Work-in-Process Control

Recognize the effect of depreciation, amortization, gains, and losses on the cash flow statement.

Understand the classification of activities reported on the statement of cash flows.

Prepare the statement of cash flows using the indirect method.

Identify and classify operating, investing, and financing activities.

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Definitions:

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, aiming to harmonize the law of sales and other commercial transactions across state lines.

Public Policy

Principles and standards regarded by the legislature or by courts as being of fundamental concern to the state and the whole of society.

Original Obligor

The original party responsible for repaying a debt or fulfilling an obligation under the terms of a contract.

Creditor Beneficiary

A third party that benefits from a contract made between two other parties because the contract discharges a debt or duty owed to them.