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Sir when there are intra group sales, i understand that revenue must be deducted by the relevant sales amount, because these “sales” are just transfers, rather than actual sales to the final consumer. Therefore, it makes sense when consolidating, the sales amount is deducted from the revenue.
But then why is this amount added with the cost of goods sold?
could you please kindly help me understand
Thank you sirDr Sales
Cr Purchases (part of COS)with the same number – so it is DEDUCTED from COS
Are you talking about PUPs /PURPs which is a completely different adjustment? PUPs are added to COS.
Sir, in the open tuition notes, if you could kindly refer to example 4. vader and maul. The answer deducted 20m from revenue and added 20m to cost of sales, dont understand why they added to cost of sales
You are a fibber!
The 2 cost of sales numbers are in brackets and the inter-company sale is not in brackets. So it is deducted!
Thank you so much sir!!
Silly mistake from my side ….when I said added I meant subtracted because the other figures were in brackets …my bad sir
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