is it true that when we purchase goods for resale capital decreases because purchases increases and profit decreases?
Ask the Tutor ACCA FA
double entry
5y ago#1No.
At the end of the period when the profit is calculated the goods will either have been sold (and so profit will increase unless they were sold at a loss), or they will still be in inventory in which case the profit is not affected.
Sign into reply to this topic.