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Process costing
In process costing while creating Finished Stock account why do we take cost of sales amount and not the actual sales(i.e., cost of sales + profit) amount.
Answers (4)
You can credit Sales instead of Cost of sales. If you credit Sales, you need to compute the profit in the Finished stock account and the same will be credited to the Income statement.
If i credit sales profit will be debited in Finished Stock account and that should be transferred to income statement. Am I correct mam
If i credit sales profit will be debited in Finished Stock account and that should be transferred to income statement. Am I correct mam
That's it. So you can use any method you are comfortable with.