consolidation

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August 10, 2018 at 1:40 pm #467195
adarsh1997
Participant
- Topics: 646
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Hello Chris.
1. How should unrealised profit be treated?
-The answer is DR cost of sales and CR inventory.
-Kindly explain why do we need to DR COS?
Thanks.
August 13, 2018 at 8:01 pm #467745
P2-D2
Keymaster
- Topics: 4
- Replies: 7232
Hi,
We have to reduce the profit made on the sale of the inventory, which is part of our trading operations, hence as cost of sales is part of our trading account it seems appropriate to make the adjustment here.
Thanks
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