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
I thought the correct answer should be
Dr Impairment on 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.
How did you get on in your exam?