- This topic has 1 reply, 2 voices, and was last updated 3 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › inventory
a business had an opening inventory of 180000 and closing inventory of 220000 in its financial statements for the year ended 31 dec 2015
1- inventory ac dr 180000
to statement of pl ac 180000
statement of pl ac dr 220000
to inventory ac 220000
2-statemnt of pl ac 180000
to inventory ac 180000
inventory ac 220000
to statement of pl ac 220000
why is the 2nd answer correct? can you explain the journal entry?
There is an opening debit balance on the inventory account of 180,000.
We remove the opening balance by crediting the inventory account and debiting the SOPL
We then create the closing balance for inventory by debiting the inventory account and crediting the SOPL.
These entries are explained in detail in my free lectures on inventory.