What is the Accounting treatment of conversion of assets into stock in trade??
For ex. Asset Rs.100 converted into stock in trade
Kindly explain both aspects related to p&l and balancesheet
Menu
Accounting entry related to conversion of assets into stock
Replies (7)
In plain and simple accounting sense it's asset cr. stock dr.
first answer is not wrong. do you know you can covert asset into wip as well
dr. wip
cr. rawmaterial
Ok so what I woke up on the wrong side of the bed
Dr. Equity
Cr. Inventory
This is when you have control over stock and inventory goes into wip mode
Now how did the ownership come, it's simple owner can do anything.
Cr. Shareholder
Dr. Wip
In order to do that
Dr. Share holders equity
Cr. Share holder liability
If you don't like your partners transact like below
Dr. Shareholder capital
Cr. Shareholder liability
Who is best that me @ sabyasachi
The process is simple.
Related Topics
CAclubindia
