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Cost of goods sold
Why cogs is posted on cr side of the stock account and Dr side of the trading account. Proper logical explaination please.
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cogs= opening stock(debit)+net purchases(debit)+direcet expenses(debit)-closing stock(credit)
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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