Journal Entries posted between MM-FI
I have a clarification with JE posted in background between MM & FI.
1. Raw Material sent for production
Raw Material consumed a/c DR 15000
Inventory RM a/c CR 15000
2. Finished goods recieved from production
Inventry FG Dr 20000
Change in Stock Finished Goods Cr 20000
3. Finished goods sent to Customer
COGS Dr 5000
Inventory Finished goods Cr ?????
My doubt is in 3rd JE, what is the purpose of debiting COGS (DR) against Inventory FG account (CR)? What happens to the Change in Finished Goods account?
Please explain with amount which I assume I may not have given the correct figures. But I want to understand this entire cycle with correct amounts debited and credited along with the respective GL accounts.