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Hi, you mentioned it was deliberate at the end of the video that you had no purchases, but if you did have purchases rather than the figure going to the income statement it would have gone to the balance sheet instead, as a current asset right?
I didn’t say that we had no purchase – we did have purchases!!!
What I said what that it was deliberate that all of the purchases had been sold, because had they not all been sold there would be inventory left over (which would indeed be on the Statement of financial position).
How we deal with inventory is dealt with in a letter chapter and lecture – it is one o the adjustments needed at the end of the accounting period.
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