Accounting For Wastage Flashcards
1
Q
What is wastage in terms of businesses ?
A
The amount of material that is lost within production or giving a service
2
Q
What is normal wastage ?
A
Wastage that the business has accounted for / bugeted for
3
Q
What is abnormal wastage ?
A
Wastage that the business has not accounted for, anything above normal wastage
4
Q
If any wastage can be sold as scrap sales, what happens to the money from the sales ?
A
Goes towards the cost of production, reducing the total costs.
5
Q
Revenue generated from normal wastage is credited to which account within the business ?
A
The production account
6
Q
Revenue generated from abnormal wastage is credited to which account within the business ?
A
The abnormal wastage account, reducing the cost of the total abnormal wastage
