How to record sale of scrap during construction
Recording the proceeds from selling scrap materials generated during the construction of a fixed asset.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash | Debit | 1,500.00 | - |
| Construction in Progress | Credit | - | 1,500.00 |
💡 Accountant's Note
Proceeds from the sale of scrap or incidental items during construction are typically credited to the Construction in Progress (CIP) account to reduce the total cost of the asset.
Practitioner & Systems Framework
💻 ERP Architecture
Apply as a credit memo or negative cost within the project ledger.
⚠️ Audit Flags
Unexpected income accounts used instead of cost offsets.
📄 Required Documentation
Scrap sale receipts and weigh-in tickets.
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