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Question on closing inventory

    • Thread Starter


    If closing inventory are recorded at cost $10,000 but has a NRV of $8,000. What is the appropriate double entry?

    The suggested answer was
    Dr Cost of Sales
    Cr Inventory

    I thought the correct answer should be
    Dr Impairment on inventory
    Cr Inventory

    This is because since the inventory were not yet sold at the end of the year, there should not be an increase in the cost of sales.

    Looking forward to the lecturers/ students responses.

    Thanks in advance.
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