Inventory

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    Tram
    Participant
    • Topics: 3
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    I have 2 questions, actually

    1) what is the difference between a) the solder take goods from the business and b) the internal sales to owner.

    As i understand, for a) we will dr drawings/ cr purchase at cost while for b) we will dr owner current account/ cr sales at cost. How could we identify which case it is.

    2) what is the diferrence between treatment for a) nav lower than cost and b) goods stolen, destroyed

    For a): is the cost is still at the cost of goods sold, we won’t transfer to other cost (under gross profit). For b) we need to transfer. Is it correct?

    Thanks so much.


    Profile photo of John Moffat
    John Moffat
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    • Topics: 3
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    Q1

    The question will either say that the owner has taken goods, or it will say that there have been sales to the owner. ( the second is much less likely)

    Q2

    Your understanding is correct :-)

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