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hi mr.moffat
Q1:I saw your first video of inventory and ias 2 example 1-3
In which you debit the sale account after credit as I know Sales account will always credit when bussiness make a sale?
Q2:why you did not take closing inventpry in purchase account(T ACCOUNT)instead of inventory account(T account)?
I am waiting for your answer.
Thank you.Q1 I do credit the sales account with the sale! When we close off the account at the end of the period, we debit sales and credit SOPL. This is explained in the earlier chapters on double-entry bookkeeping.
Q2 We need an inventory account because inventory appears on the SOFP and we therefore need a balance on the account. Also, we need to show the calculation of cost of sales as opening inventory plus purchases less closing inventory – so we don’t change purchases but have a separate account for inventory.
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