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Freight in should be considered as an addition to cost of items purchased. However, freight charges for materials purchased may be charged to factory overhead for convenience.

Freight in should be considered as an addition to cost of items purchased. However, freight charges for materials purchased may be charged to factory overhead for convenience.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kindly answer the 2 questions.
Freight in should be considered as an addition to cost of items purchased. However, freight charges for materials purchased may be charged to factory overhead for convenience. A True B False
Transcribed Image Text:Freight in should be considered as an addition to cost of items purchased. However, freight charges for materials purchased may be charged to factory overhead for convenience. A True B False
ABC Ironworks accumulates fairly large quantities of metal shavings and trimmings. At least once a month, scrap metal is sold to a local producer. For this month, scraps were estimated to be worth P3,500 but were sold on account for P3,700. What is the journal entry if scrap is recognized upon separation thereof from work in process and revenues is treated as reduction in the cost of a particular job? A B Debit - Accounts Receivable P3,700; Credit - Factory Overhead Control P3,700. Debit - Accounts Receivable P3,700; Credit - Work in Process Inventory P3,700. Debit - Accounts Receivable P3,700; Credit - Other Income P3,700. Debit - Accounts Receivable P3,700; Credit - Scrap Sales P3,700.
Transcribed Image Text:ABC Ironworks accumulates fairly large quantities of metal shavings and trimmings. At least once a month, scrap metal is sold to a local producer. For this month, scraps were estimated to be worth P3,500 but were sold on account for P3,700. What is the journal entry if scrap is recognized upon separation thereof from work in process and revenues is treated as reduction in the cost of a particular job? A B Debit - Accounts Receivable P3,700; Credit - Factory Overhead Control P3,700. Debit - Accounts Receivable P3,700; Credit - Work in Process Inventory P3,700. Debit - Accounts Receivable P3,700; Credit - Other Income P3,700. Debit - Accounts Receivable P3,700; Credit - Scrap Sales P3,700.
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