[sdj]

can anyone send me double entry for stock provision ? Provision amount is 200,000.

further stock is over valued by 100,000 what will be the accounting entry for over valuation of stock.

Early response will be of immmmmense help for me:o

[chris0298]

Provision of stock xxx
Stock xxx

[naazim]

The following accounting entries should be processed

Dr Cost of sales
Cr Inventory

Obsolete stock should not be regarded as a provision as a provision is an obligation. There is no obligation to pay anyone thus the misconception of a provision is not correct. The obsolence of stock is an impairment of stock. The cost of sales has to be debited otherwise there will be double counting if it is debited to an expense account such as "provision of stock"

NE CA(SA) - CHARTERED ACCOUNTANT (SOUTH AFRICA)

[naazim]

The following accounting entries should be processed

Dr Cost of sales
Cr Inventory

Obsolete stock should not be regarded as a provision as a provision is an obligation. There is no obligation to pay anyone thus the misconception of a provision is not correct. The obsolence of stock is an impairment of stock. The cost of sales has to be debited otherwise there will be double counting if it is debited to an expense account such as "provision of stock"

NE CA(SA) - CHARTERED ACCOUNTANT (SOUTH AFRICA)

[morgaine300]

The original question is almost 4 years old.

Thread closed.