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Inventory Adjustment Entries

15 February 2009 4,955 views 2 Comments

Dears,

what are the adjusting enteries when inventry is recorded under perpatual system & when at the year end period count is performed & descripencies are found ehither favourable Or Unfavourable.

Best regards:

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2 Comments »

  • admin (author) said:

    Message from an IFRSLIST member:

    The entries are as follows

    Unfavourable

    Debit Cost of sales

    Credit Inventory

    Favourable

    Debit Inventory

    Credit Cost of sales

    As inventory related adjustments are supposed to go through the cost of sales.

    Regards

  • admin (author) said:

    Message from an IFRSLIST member:

    Dears
    There should always be Missing and over account should be debited or
    credited by any inventory adjustments. And this account should be
    cleared avery closing by consdering it as on of the missing overhead
    accounts that should be incorporated in the actual overhead rate which
    used to be charged on WIP, FG, COGS.

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