Question

Recognise the following transaction in the accounting records(general journal).

1. The following events, as authorised by the owner on 31 december 2019,still has to be recognised:
•A loss to the amount of R66 800 resulting from the confirmation that certain inventory items' cost price is more than the net realisable value thereof.
•A donation of trade inventories to a local institution to the amount of R10 00.

Answer 1

Loss recognized

• Debit Profit and credit loan other expenses - 66 800

transfer of materials to the institution

• Debit other expenses credit materials - 1 000