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Inventory

Former Member
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27

How is change of inventory ( increase/decrease in inventory) accounted.

What are the GL determinations for the same.

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Answers (1)

Answers (1)

former_member583013
Active Contributor
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Change of Inventory can be classified in two.

One is cost variance and another is goods variance

The cost variance relates to change in cost which happens when you perform Material Revaluation

The Goods variance happens when you perform a Goods Issue / Goods Receipt / Cycle count process. Here the Quantity change +ve or -ve post to the Variance account.