Cost of sales

This topic has 1 reply, 2 voices, and was last updated 6 years ago by Stephen Widberg.

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March 3, 2020 at 4:44 pm #563931
Anuja Nair
Member
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Hi sir , in order to eliminate unrealised profit still in inventory from consolidated financial statements, we have to

DR Cost of sales
CR Inventory

By debiting cost of sales, are we increasing the account or decreasing the account ? and why do we have to increase or decrease cost of sales
March 4, 2020 at 5:58 pm #564217
Stephen Widberg
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COS = opening inv + purch – closing inv

Technically we are reducing the value of closing inventory

Closing inventory is a credit, so we reduce by posting a debit
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