In instances where goods are returned or allowances are made, the Sales Returns and Allowances account, a contra-revenue account, is used to adjust the sales revenue. what is the cost of sales The reason you record allowances and returns in a separate account is because it helps you keep track of revenue losses from customers […]

Obsolete is different from slow-moving inventory in a few ways, but mostly due to its reaching a particular timeline. Slow-moving inventory can also continue to be sold after adjusting to price, marketing, and other efforts to get it out the door. A year seems like a short time, but in terms of the product lifecycle, […]

Both GAAP recording transactions and IFRS require us to consider the net realizable value of inventory for valuation purposes. Under GAAP, inventories are measured at lower of cost or market provided that the market value must not exceed the NRV of inventory. It ensures the accuracy and reliability of financial statements by preventing the overstatement […]

An essential application of equivalent units of production is in process costing, independent contractor tax form requirements which analyzes the flow of money within manufacturing sectors. Equivalent units of production for direct materials and conversion aren’t always the same. Direct materials and conversion costs may have different completion levels, so their equivalent units may vary. […]