How to Record GFM Inventory Scrap Proceeds
Accounting for proceeds from the sale of scrap generated from Government Furnished Material (GFM) which must be credited back to the government.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash | Debit | 850.00 | - |
| Liability to Government - GFM Scrap | Credit | - | 850.00 |
💡 Accountant's Note
Proceeds from the sale of GFM scrap are not company revenue; they represent a liability to the contracting officer or a credit to be applied to the contract price per FAR 52.245-1.
Practitioner & Systems Framework
💻 ERP Architecture
Use a non-revenue clearing account to hold funds until a contract credit or refund check is issued.
⚠️ Audit Flags
Discrepancies between property disposal reports (PCARSS) and financial credits.
📄 Required Documentation
Property disposal authorization, weigh bills, and sales receipts.
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Discussion & Community Questions
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