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i just want to understand the accounting treatment on normal loss in Inventory which i purchased, in both Statement of profit or loss and comprehensive income and Statement of Financial position
Hi,
Any loss on the value of inventory is reflected within the year-end adjustment for inventory. We would record the inventory at its lower valuation due to the loss and so will recognising less of a credit in closing inventory in cost of sales. The smaller credit entry will mean that there is more a cost in cost of sales and so reflecting the loss.
Thanks
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