Inventory

Hi sir…

I had posted this same question the other day but somehow the topic was closed before I could fully clarify.

Here goes again..!

A business has opening inventory of $15000 at the start of an accounting period and closing inventory of $18500 at the end of the accounting period.

Which of the following trial balance extracts correctly shows how the opening and closing inventory will be recorded in the general ledger?

Option A

Dr Closing inventory 15000
Cr Opening inventory 18500

Option B

Dr Opening inventory 15000
Cr Closing inventory 18500

Option C

Dr Opening inventory 15000
Dr Closing inventory – SFP 18500
Cr Closing inventory – SPLOCI 18500

Option D

Dr Closing inventory – SFP 18500
Cr Opening inventory 15000
Cr Closing inventory – SPLOCI 18500

I found this qn on ACCA Study Hub.

The provided answer is Option C

Their explanation is as follows:

Opening inventory is a debit balance that is charged to cost of sales as an expense.

Closing inventory is included twice as a debit and credit to reflect that it is included in the statement of profit or loss and other comprehensive income and the statement of financial position.

The adjustments for inventory from your lectures are clear. But I still don’t fully understand what the original question that I posted is asking for.

Or is it simply a wording error?

Could you kindly clarify sir…