17.6 Accounting for byproducts Flashcards
1
Q
- joint production processes can yield not only joint products and main products but also ______
- although their toal sales values are low, the _____ in a joint productin process can affect the allocation of joint costs
- ______ can be quite profitable for a firm
A
byproducts
2
Q
2 methods of byproduct accounting
A
- production method
- sales method
3
Q
recognizes byproducts when they are sold
recognizes no byproduct inventory
A
sales method
4
Q
recognizes byproducts in the financial statements when their production is completed
does not recognize sales and costs of byproduct seperately
A
production method
5
Q
which method is preferred
A
production method is consistent with the matching principle
6
Q
which method is simpler and used in practice
A
sales method bc the dollar amounts of byproducts are immaterial
7
Q
downside of sales method
A
allows firms to manage its reported earnings by timing the sale of byproducts
