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Sale of the Scrap of raw materials appearing in the trial balance are shown on the credit side of :
- a)Trading Account
- b)Manufacturing account
- c)Profit and Loss A/c
- d)None of these
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Sale of the Scrap of raw materials appearing in the trial balance are ...
Explanation:
The manufacturing account is prepared to determine the cost of goods manufactured during the accounting period. It includes all the direct and indirect costs incurred in the production process. The sale of scrap of raw materials is considered as a reduction in the cost of production. Therefore, it is shown on the credit side of the manufacturing account.
The trading account, on the other hand, is prepared to determine the gross profit earned by a business. It includes all the direct expenses and revenues related to the sale of goods. The sale of scrap does not fall under the category of revenue earned from the sale of goods. Therefore, it is not shown on the credit side of the trading account.
The profit and loss account is prepared to determine the net profit or loss earned by a business. The sale of scrap does not fall under the category of regular business operations and is considered as an extraordinary item. Therefore, it is not shown on the profit and loss account.
In conclusion, the sale of scrap of raw materials appearing in the trial balance is shown on the credit side of the manufacturing account.
The manufacturing account is prepared to determine the cost of goods manufactured during the accounting period. It includes all the direct and indirect costs incurred in the production process. The sale of scrap of raw materials is considered as a reduction in the cost of production. Therefore, it is shown on the credit side of the manufacturing account.
The trading account, on the other hand, is prepared to determine the gross profit earned by a business. It includes all the direct expenses and revenues related to the sale of goods. The sale of scrap does not fall under the category of revenue earned from the sale of goods. Therefore, it is not shown on the credit side of the trading account.
The profit and loss account is prepared to determine the net profit or loss earned by a business. The sale of scrap does not fall under the category of regular business operations and is considered as an extraordinary item. Therefore, it is not shown on the profit and loss account.
In conclusion, the sale of scrap of raw materials appearing in the trial balance is shown on the credit side of the manufacturing account.
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Sale of the Scrap of raw materials appearing in the trial balance are ...
Because scrap generated at the time of manufacturing
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Sale of the Scrap of raw materials appearing in the trial balance are shown on the credit side of :a)Trading Accountb)Manufacturing accountc)Profit and Loss A/cd)None of theseCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Sale of the Scrap of raw materials appearing in the trial balance are shown on the credit side of :a)Trading Accountb)Manufacturing accountc)Profit and Loss A/cd)None of theseCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Sale of the Scrap of raw materials appearing in the trial balance are shown on the credit side of :a)Trading Accountb)Manufacturing accountc)Profit and Loss A/cd)None of theseCorrect answer is option 'B'. Can you explain this answer?.
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