The process of carrying forward the cost of goods sold is as follows:
1. Determine the cost of goods sold items: first of all, it is necessary to identify which costs belong to the cost of goods sold. Cost of sales usually includes costs directly related to sales, such as the cost of raw materials, process costs, labor costs, packaging costs, transportation costs and so on.
2, calculate the cost of goods sold: according to the accounting standards and the company's accounting policies, the cost of goods sold. This usually involves dealing with changes in raw material inventories, work-in-process inventories and finished goods inventories, as well as other costs associated with cost of goods sold.
3. Adjusting the cost of goods sold: In calculating the cost of goods sold, there are also some indirect costs to be considered, such as sales overhead, sales staff commission and bonuses. According to the actual situation of the enterprise, these costs will be apportioned to the various sales processes and products.
4, carry forward: at the end of the fiscal year, the calculated cost of goods sold through the corresponding accounting entries to carry forward, will be included in the cost of expenses. The specific accounting entries can be determined according to the accounting standards and accounting policies of the enterprise.
Considerations for Carrying Forward Cost of Goods Sold
1. Accuracy and Reliability: Ensure that the cost of goods sold is calculated accurately and reliably. This means the need to accurately record and account for all costs associated with sales, including the cost of raw materials, process costs, labor costs, packaging costs, transportation costs and so on. Ensure that all direct and indirect costs are allocated appropriately to the appropriate sales segment and product.
2. Compliance with accounting policies: follow the applicable accounting standards and accounting policies of the enterprise. Carrying forward the cost of goods sold needs to be performed in accordance with the accounting standards (such as IFRS) and internal accounting policies applied by the enterprise. Ensure that the accounting treatment complies with relevant regulations and norms.
3. Internal controls and auditing: Establish a sound financial and internal control system to ensure that the cost of goods sold is accurately recorded and reported. This includes ensuring that relevant accounting entries and vouchers are correct and complete, and conducting audits and internal audit supervision and inspection.
4, the treatment of inventory changes: cost of sales calculations usually need to take into account factors related to inventory changes, such as changes in raw material inventories, work-in-process inventories and finished goods inventories. When carrying forward the cost of goods sold, you need to correctly handle these inventory changes and ensure that their impact on the cost of goods sold is properly calculated and recorded.
5. End of the accounting cycle: Carrying forward cost of goods sold is generally done at the end of the fiscal year or at the end of the designated accounting cycle. Ensure that the carry forward is performed at the correct point in time to ensure the accuracy and completeness of the cost of goods sold.
6. Company Policies and Procedures: Understand and follow the company's internal cost of sales carry forward policies and procedures. Different companies may have different requirements and processes, and it is important to make sure that you follow the policies and procedures established by the company to carry forward.