Sir in the material cost account
We usually
debit
opening balance
Purchases
Return to stores
Credit
Issues to production
Returns to suppliers
Production overheads
Statement of profit and loss
So does this mean that if a business makes a profit in the income statement
This will be debited in the material cost account?
And if the business makes a loss it would be credit in the material cost account?
Ask the Tutor ACCA MA
Accounting for inventory(Material Inventory Account)
5y ago#1No. Any profit or loss is transferred to the capital account (if a sole trader) or to retained earnings (if a limited company).
However this is relevant for Paper FA and is not relevant for Paper MA.
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