What Does The Item Cost 6? The Case of Stock Purchases
The element 6, for purposes of the General Accounting Business Plan is defined as expenses by nature, but when referring to stocks that are associated with the account 60 and 61 we realize that these are costs. There is a clear difference between an expense and a cost, for example from the perspective of the generation of economic benefits (BE). We note that you will always be an expense related to the same period in BE are generated, while in the case of cost related to the generation of BE but in the future.
All costs are recognized in the asset (balance sheet) but in the case of stocks, which usually remains in the company no more than a period required to be recognized in the income statement, in the Profit and function losses will be in the Cost of Sales (remember that its determination can be obtained from the ratio between purchases and inventory changes) and in the case of Profit and loss by nature his presentation is obvious, because they affect the profit margin or value added as appropriate.
Accounting Plan Our model has a sui generis recognition of expense accounts, for the record twice (once by nature and one in purpose or function) in there that require accounting tricks to override this effect at the time centralizing the information. These mechanisms are implemented with the use of the account 61 79 Changes in inventories and charges relating to costs and expenses accounts.