What is the Accounting treatment of conversion of assets into stock in trade??
For ex. Asset Rs.100 converted into stock in trade
Kindly explain both aspects related to p&l and balancesheet
7 Replies
sabyasachi mukherjee
(27574 Points)
Replied 16 December 2023
In plain and simple accounting sense it's asset cr. stock dr.
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 16 December 2023
first answer is not wrong. do you know you can covert asset into wip as well
dr. wip
cr. rawmaterial
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 17 December 2023
Ok so what I woke up on the wrong side of the bed
Dr. Equity
Cr. Inventory
This is when you have control over stock and inventory goes into wip mode
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 17 December 2023
Now how did the ownership come, it's simple owner can do anything.
Cr. Shareholder
Dr. Wip
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 17 December 2023
In order to do that
Dr. Share holders equity
Cr. Share holder liability
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 17 December 2023
If you don't like your partners transact like below
Dr. Shareholder capital
Cr. Shareholder liability
Who is best that me @ sabyasachi
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