Ask Experts Questions for FREE Help !
Ask
    olufemi201's Avatar
    olufemi201 Posts: 1, Reputation: 1
    New Member
     
    #1

    Aug 24, 2009, 07:41 AM
    Year end adjustment in Inventories
    How to account for Inventories in an year end adjustment
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
     
    #2

    Aug 24, 2009, 03:08 PM

    If you're doing perpetual method, you will either debit or credit the inventory account, whatever works to get it to the balance that matches your physical count. That is, if the physical count is lower than the balance in your inventory account, you have to credit it to reduce that balance down. Whether that is debit or credit, the other side of that entry is always cost of goods sold.

    Caveat: this is based on the assumptions that a) you're talking about the adjustment for perpetual method, and b) that you aren't referring to manufacturing inventory accounts which can also be pro-rated to different places.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

End of Year inventory adjustment entry [ 4 Answers ]

I have just discovered that the raw inventory amount reported on our balance sheet for 2007 was understated. I want the raw inventory numbers for 2008 to be correct. In order to correct this error I will need to increase my inventory. Can I do this, or do I need to amend my 2007 1120S? The...

Prior year adjustment and notes on financial statement [ 2 Answers ]

What are the types of prior year adjustments? How to report on current year financial statements? Are there any financial guide lines or GAAP rules? cool12

Year End Adjustment [ 2 Answers ]

I'm get some problem in my tutorial question~ can someone help me solve it please? QUESTION: Maju Enterprise opened a fixed deposit account with Singa Bank Bhd on 1 March 2007. The initial deposit was RM60,000 at an interest of 5% per annum.The term of the deposit was 1 year, and the...


View more questions Search