where to put raw materials in accounts

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
Hi

I have a construction woker as a client and have been putting his raw materials in as expenses for the P&Ls. Is this right or do I need to put it in as purchases for cost of sales? The net profit figure would work out the same but I wanted to make sure it was in the right section?

Thanks for your help
Lynn

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:where to put raw materials in accounts

    Hi Lynn

    It goes in cost of sales.

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:where to put raw materials in accounts

    Hi Lynn

    I agree with Claudia but, assuming your client is a sole-trader, there is no statutory format for the accounts so you can put it anywhere you like.

    As you say, it makes no difference to net profit.

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:where to put raw materials in accounts

    I would also agree with the others, another point, if he has raw materials hopefully you will have adjusted for closing stock?

    Regards

    Dean

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