Inventory recovered

Dr Pilferage account

Cr. Inventory

(Being stuff stolen by employees)

Dr. Inventory

Cr. Pilferage accoubt

(Stuff recoverd by employees)

But during this process , your ratios are bad. Make a disclosure 

Even in AS you dont have such account called as profit and loss adjustment account. Let me tell you sonething, i love COS accounting instead of trading account. Its meaningless to make too many formats.cheers

Nice to know that many support this view. India is dynamically shifting towards global harmony in accounting standards like many coubtries. All big companies use global standards and so can normal companies because some wrok load or cost constraints will reduce.