POC entries
LAKHMICHAND Khandelwal (25 Points)
05 April 2021
what will be the entries with clear impact in WIP and COGS
LAKHMICHAND Khandelwal (25 Points)
05 April 2021
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 06 April 2021
To tell the truth, there are many ledgers like expenses, COGS, payables, Inventory, Purchases, Sales etc, and lots of entries for this. Sometimes if a company has subsidiaries, they use control accounts as well. If you follow cost accountants material, in that, apart from branch entries, most of the control account entries can be used to perfectly represent transactions related to COGS and WIP
LAKHMICHAND Khandelwal
(25 Points)
Replied 06 April 2021
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 06 April 2021
ok, first purchsed raw matrial
Purchases a/c
To Creditor a/c
then raw material is debited to inventory a/c and from there taken to WIP again.
WIP a/c
To Raw material Inventory a/c
once production is complete and WIP is transfered to Finished goods a/c
By Finished Goods a/c
By Closing WIP a/c
To WIP a/c
closing WIP is added to closing inventory again and this will be again used in the next periods WIP. (Closing WIP is unprocessed WIP)
Then to offset purchases with finished goods in COGS a/c
By COS a/c
To Inventory a/c
here COGS will reduce to closing inventory.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 07 April 2021
No problem. By the way I meant purchases set off with ending inventOry because it holds WIP as well.
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