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As-2

Accountancy

Sir in case if inventory is valued at NRV ,how will the cost of inventory be brought down in the books of account , whether the difference between NRV and cost be charged to p and l a/c ?what would be the journal entry?

Abhishek Purohit

CA Inter

★ 10K+

05-Mar-21 18:13

304

Answers (4)

Best Answer

Yes difference is recognised as expense in the period in which it is written off. Entries can vary. Sometimes direct P&L Dr. to Inventory A/c may be done while at times a separate account - Loss on Inventory write-off is opened. If so, it will first be debited and inventory a/c credited. Later on balance in Loss on Inventory write-off will be transferred to P&L A/c