If we have been given the value of cost of sales, purchases, opening & closing inv, so if there is additional information for adjustments to opening & closing inventory. is cost of sales will be affected by these adjustments?
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INVENTORY
9y ago#1It depends on what the adjustments to inventory are.
If the inventory has been valued wrongly, then correcting it will affect the cost of sales.
Hi,
my question is why the cost of sales should include inventories written off or written down?
As far as I understand the meaning of COGS is cost of goods SOLD. But why should we include the amounts (written off or written down) into it that is not related to Sales?
Here are the text from ACCA F3 book:
The costs of inventory written off or written down should not usually cause any problems when calculating the gross profit of a business, because the cost of goods sold will include the cost of inventories written off or written down, as the following example shows.
9y ago#3Please do not post the same question twice.
I have answered your other post.
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