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.
Message from an IFRSLIST member:
The entries are as follows
Debit Cost of sales
Credit Cost of sales
As inventory related adjustments are supposed to go through the cost of sales.
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.
You must be logged in to post a comment.