Cost of Goods Sold Journal Entry
Cost of Goods Sold or Cost of Sales is a direct cost associated with the cost of production it doesn’t include indirect cost which is not related to cost of production. As there two inventory accounting systems of recording inventory that are Periodic Inventory System And Perpetual Inventory System , so cost of goods sold journal entry is also recorded accordingly. We can record Cost of Sales Journal Entries with the help of an example. Let say, that we have opening inventory of Rs. 50000. Inventory Purchases (6 Pieces of Sofas at the rate of Rs. 70000 each) during the accounting period is Rs. 420000. 2 Units of Sofas remain unsold during the accounting cycle worth Rs. 140000. Pass Journal Entries to record Cost of Sales of Sofas. (i) To Record Cost of Sales Cost of Sales a/c 470000 ...