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
Keymaster
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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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