Cost of goods sold
Dhruv (student) (63 Points)
09 July 2015
Why cogs is posted on cr side of the stock account and Dr side of the trading account. Proper logical explaination please.
Dhirender Gupta
(Partner)
(42 Points)
Replied 09 July 2015
cogs= opening stock(debit)+net purchases(debit)+direcet expenses(debit)-closing stock(credit)
CMA Poornima Madhava
(CMA)
(13097 Points)
Replied 09 July 2015
Bcoz COGS has to be reduced from the stock a/c to arrive at closing balance of stock. Also the same is debited to trading a/c bcoz such cost has to be reduced from sales to arrive at gross profit.
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