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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.

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Sri Varshini

Sri Varshini

CA Inter

435

29-Aug-20 17:57

25

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.


Madhuri Veluri

Madhuri Veluri

Moderator

31-Aug-20 11:02

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


Sri Varshini

Sri Varshini

CA Inter

435

31-Aug-20 13:44

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.


Madhuri Veluri

Madhuri Veluri

Moderator

31-Aug-20 14:40

Thank you mam


Sri Varshini

Sri Varshini

CA Inter

435

31-Aug-20 14:41

Happy Mother's Day
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