ACCOUNTING ENTRIES
What is the answer for following questions ?
company purchased one car for qr:75000 at the middle of financiel year,wat will be the entry for depreciation and the amount of car at the end of financiel year
What does mean by cost of goods sold,wat is the defference between cost of goods sold and purchase ?
wat is the deffrence between stock and inventory ?
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Hello
1) Depreciation= Asset cost devided by equal period of expected product life
Ie:Depreciation=1000/10=100, then one hundred to be deduct each month from the total cost .
2) cost of production means all Direct cost+indirect cost needed to produce the goods.
Ie: Cost of raw material+Labour cost+fixed+ Admin cost+cost+Rent+Rate+Tax=Cost of production.
COP+selling/distribution cost=cost of sales
Sales-Cost of sales=Profit
Hello
1) Depreciation= Asset cost devided by equal period of expected product life
Ie:Depreciation=1000/10=100, then one hundred to be deduct each month from the total cost .
2) cost of production means all Direct cost+indirect cost needed to produce the goods.
Ie: Cost of raw material+Labour cost+fixed+ Admin cost+cost+Rent+Rate+Tax=Cost of production.
COP+selling/distribution cost=cost of sales
Sales-Cost of sales=Profit
First book the car price in the system as an asset. Then identify rate of depreciation/estimated asset life and go accordingly. Amount of car at the end of fiscal year suppose to be that amount after deducting of 12 months depreciation from QR. 75000 but it can be changed due to some additional expenses added in this car during the year or changing of estimated asset life.
"Cost of goods sold" widely use in terms of cost accounting. It means actual production/manufacturing cost of a product(Direct & indirect cost) which you sold.
So, cost of goods sold includes actual manufacturing cost plus profit margin.
Stock means, whatever the materials you have available for use in your warehouse.
Inventory means, when you count all material(usable & useless) you have in your warehouse physically & reconcile with system balance & finding amount stuck in your warehouse. It's called inventory estimation & valuation also as well.
hello
need to identify the rate of depreciation, then calculate it for 6 months , deduct it from value of vehicle,
purchse means buying a product or service for money, cost of goods sold means total cost of mfg a product.
cost of production+ profit = sales
stock and inventory are more of the same ,