By-products and scrap can be accounted for using the

• net realizable value (offset) approach in which the NRV of the by-products/scrap reduces either the

>- work in process inventory of the joint prod¬ ucts when the by-products/scrap are pro¬ duced

>■ cost of goods sold of the joint products when the by-products/scrap are produced

• realized value (other income) approach in which the NRV of the by-products/scrap is shown on the income statement as either an

>- other revenue item when the by-products/ scrap are sold or

>• other income item when the by-products/ scrap are sold. LO1.