If Scrap Is Reused as Direct Material Rather Than Sold

question 37

Multiple Choice

If scrap is reused as direct material rather than sold as scrap, which of the following would be the proper account?

• A) Accounts Receivable is debited at its estimated net realizable value and then credited when the scrap is reused
• B) Materials Control is debited at its estimated net realizable value and then credited when the scrap is reused
• C) Manufacturing Overhead Control is debited at its estimated net realizable value and then credited when the scrap is reused
• D) Work-in-Process Control is debited at its estimated net realizable value and then credited when the scrap is reused

---

Definitions:

Scarce Resources

Natural, human, and artificial resources that are limited in supply and cannot satisfy all human wants and needs.

Secondary Effects

The unintended consequences of economic actions, which can occur as indirect results of a policy or event.

Economic Actions

Decisions or behaviors taken by individuals, firms, or governments that affect the production, distribution, and consumption of goods and services.

Positive Economic Statement

An objective statement about the economy that can be tested and validated through observation.