Here are some examples of journal entries related to finished goods:
1. Transfer of Finished Goods from Work in Progress:
When production is completed and goods are transferred from Work in Progress (WIP) to Finished Goods.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Finished Goods A/c | 50,000 | |
| To Work in Progress A/c | 50,000 | |
| (Being goods completed and transferred from WIP to Finished Goods) |
2. Sale of Finished Goods:
When finished goods are sold to a customer.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Accounts Receivable/Cash A/c | 75,000 | |
| To Sales A/c | 75,000 | |
| (Being finished goods sold to customer) |
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Cost of Goods Sold A/c | 50,000 | |
| To Finished Goods A/c | 50,000 | |
| (Being cost of goods sold recorded for finished goods sold) |
3. Recording Finished Goods Inventory:
At the end of the accounting period, inventory of finished goods is recorded.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Finished Goods Inventory A/c | 20,000 | |
| To Inventory Adjustment A/c | 20,000 | |
| (Being finished goods inventory recorded at the end of the period) |
4. Revaluation of Finished Goods Inventory:
If there is a need to revalue the finished goods inventory.
| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Inventory Revaluation Loss A/c | 5,000 | |
| To Finished Goods Inventory A/c | 5,000 | |
| (Being finished goods inventory revalued to reflect lower market value) |
These entries help in accurately recording the transfer, sale, and inventory of finished goods in the accounting records.
