Depends on whether its a cash sale or a credit sale;
1. Cash sale: Cr invetory(BS), Dr cash&bank (BS), you would credit this to the income statement (revenue) as well, this would be reflected in the cash flow statement as a cash in flow (decrease in inventory)
Credit sale: Cr inventory(BS), Dr receivables (BS), Credit sales (IS), then this would be recognised as a cash out flow in the cash flow statement coz cash is now tied up in receivables.
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Depends on whether its a cash sale or a credit sale; 1. Cash sale: Cr invetory(BS), Dr cash&bank (BS), you would credit this to the income statement (revenue) as well, this would be reflected in the cash flow statement as a cash in flow (decrease in inventory)
Hope this helps.
Thanks. Could you use the $200 in this instance. Wouldn't COGS have to be factored in somehow? How does it end up balancing.
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Minus mollitia dolorem quam dignissimos necessitatibus. Tempora ut quos et dolor similique veritatis ab. Qui architecto autem delectus animi.
Magni quam possimus ea provident molestias. Repudiandae tempora atque est ipsum voluptatem omnis iste. Nihil iure veritatis unde consequatur. Unde et consequatur consequatur voluptatum atque. Dignissimos doloribus nihil dolor est temporibus optio.
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