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in case there is abnormal wastage of inventory should we reduct it from cost of sales, and charge it to st of p/l as loss,
or its already taken into account while doing closing stock measurement at lower of cost & nrv at the end of yr.
my 2nd question, is carriage inward is added to the cost of the inventory, as its directly attributable cost.
Hi,
Abnormal wastage is something that is more related to management accounting and cost accounting. In financial accounting we look at valuing the goods at the lower of cost and NRV, with the cost calculated using the cost formulae (FIFO and weighted average).
You won’t see carriage inwards in FR, it is more likely to be seen in FA, but it is a part of cost of sales.
Thanks
Hi,
Abnormal wastage is something that is more related to management accounting and cost accounting. In financial accounting we look at valuing the goods at the lower of cost and NRV, with the cost calculated using the cost formulae (FIFO and weighted average).
You won’t see carriage inwards in FR, it is more likely to be seen in FA, but it is a part of cost of sales.
Thanks
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