Q30.Discuss meaning, accounting treatment and control of scrap.
Meaning of Scrap: It is defined as the incidental residue from certain type of manufacture, usually of small amount and low value, recoverable without further processing.
Accounting Treatment of Scrap: Normal scrap charged to particular job or product if scrap is identified with a particular job or product. If it is not identified with a particular job or product, it is charged to overhead. Abnormal scrap net cost charged to profit and loss account.
Control of Scrap:
1. Normal allowance should be predetermined.
2. Proper reporting to top management.

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