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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)
Madhuri Veluri
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
Thread Starter
Sri VarshiniIf 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.
