Loss on sale of material
Atharv Sankliya (1356 Points)
06 January 2023
in which account the loss on sale of material is debited
5 Replies
Yasaswi Gomes new
(Finance )
(4545 Points)
Replied 07 January 2023
Sales account. Its a credit account in the ledger. By loss on sale in the credit side. In the income statement, its an operating loss and debit it.
sabyasachi mukherjee
(27664 Points)
Replied 07 January 2023
Loss on sale of material is debited to profit loss account.
Yasaswi Gomes new
(Finance )
(4545 Points)
Replied 07 January 2023
Usually loss os sale due to market price moments. Im.notnsure if replacement cost is used here. But nrv method must be used if the prices have fallen. So why did they sell the material for lower price
Yasaswi Gomes new
(Finance )
(4545 Points)
Replied 07 January 2023
when there has been a decline in the price of materials and it is
estimated that the cost of the finished products will exceed net realisable
value, the materials are written down to net realisable value. In such
circumstances, the replacement cost of the materials may be the
best available measure of their net realisable value.
So this means replacement cost has nothing to measure here but nrv must be.
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