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January 21, 2016 at 5:03 pm
In Example 2, in the Inventory A/C why do we put 4000 in the debit side?
April 13, 2016 at 4:42 pm
Because inventory is an asset and when assets increase they are debited.
October 8, 2015 at 4:14 pm
Mr.john moffat your the best.. I need some lecture on cash flow statement,consolidation ,inventory how to do NRV .
John Moffat says
October 8, 2015 at 4:22 pm
Thank you. There are lectures on everything in the syllabus for Paper F3.
August 22, 2015 at 11:36 am
Hi Mr Moffat,
I am unsure with questions regarding sole trader taking drawings whether to Cr Inventory or to Cr Purchases.
It is not always clear, can you please explain the difference?
August 22, 2015 at 12:19 pm
The inventory is counted at the end of the period. The owner is not going to wait until it is counted, and then take some for himself 🙂
We always Cr purchases and Dr drawings.
August 23, 2015 at 11:16 am
Many thanks Mr Moffat.
April 1, 2016 at 5:50 pm
Dear Mr Moffat,
I’m sorry if this can be a silly question. However, I wonder if the owner takes money (cash) from the business, should we Cr Cash a/c and Dr Drawings a/c?
April 1, 2016 at 6:17 pm
If they take cash, then yes – this is the entry (and is explained in the lecture on double entry bookkeeping).
May 31, 2015 at 5:42 am
In topic inventory IAS 16 the lecturer has credited the inventory in income statement example 2. Inventory is an asset therefore it should be debited in income statement why it has been credited? Because on income statement debit side are for expenses and credit side is for income. Please explain.
May 31, 2015 at 12:05 pm
The inventory account records the asset, and this has been debited.
The income statement has been credited because closing inventory reduces the cost of goods sold. Assets do not appear in the income statement!
I suggest that you watch the lecture again.
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