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When preparing published accounts, if there is a note or an adjustment in the inventory , should it be adjusted in the cost of sales ?
Can I also know why just not adjust it in the inventory item in the SFP if , it has to be adjusted through the cost of sales ?Hi,
The additional information will always require us to perform a double entry, if we do not then the SFP will not balance.
The year end inventory adjustment is to DR Inventory (SFP) CR Closing inventory (C’o’s).
So to answer your question, we need to post the entry to the SFP as well as the C’o’S.
Thanks
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