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Scenario: Assume that a manufacturing company usually pays a waste company (by the pound to haul away manufacturing waste. Recently, a landfill gas company offered to buy a small portion of the waste for cash, saving the manufacturing facility a portion of its disposal costs and providing it with proceeds from the disposal.

The sale of manufacturing waste is not a primary business activity of the manufacture; however, it will now result in an inflow of cash.

Which is more appropriate-classifying this transaction as an increase in revenue, a decrease in expense or as a gain?

Analysis-Record the transaction as increase in revenue or decrease in expense? alternatively, should the transaction be recorded as a gain?

Attachment:- Scenario 3.rar

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93108112
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