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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Carry forward of Inventory
Sir why is the carry forward of inventory a matching concept
Isn’t this a going concern because we assume that this inventory will be included for a business that will happen the next year also?
It is the matching concept because we match the cost of the goods sold against the revenue from those goods. If we didn’t carry forward closing inventory we would be charging the expense of the goods purchased, which doesn’t ‘match’ with the revenue from the goods sold.
Oh okay understood that clearly sir but could we also take it as a going concern?
No. That only affects the valuation of it.