688 Adjustment Parts and Accessories Inventory

Cost of Sales

Fixed Operations

Cost of Sales Synopsis

Account 688 is established to record the amount of adjustment required to reconcile the value of inventory on hand recorded in Account 242, Parts & Accessories (Inventory).

Debits

Credits

  1. Adjustment to decrease the Parts and Accessories inventory

  2. Inventory value of parts and accessories scrapped

  1. Adjustment to increase the Parts and Accessories inventory

  2. Amount refunded under the Parts and Accessories Return Plan

 

Example 1

Record $985 of appreciation in parts value due to increase in parts pricing from the manufacturer.

Journal: General Journal

Entry:

 

Debit

Credit

Account 242

Inventory Parts & Accessories

$985

 

Account 688

Adjustments Parts & Accessories Inventory

 

$985

Example 2

Record the $6,437 adjustment to bring book balance of Parts & Accessories Inventory in agreement with the physical inventory balance.

Journal: General Journal

Entry:

 

Debit

Credit

Account 242

Inventory Parts & Accessories

$6,437

 

Account 688

Adjustments Parts & Accessories Inventory

 

$6,437

Example 3

Record the$1,449 cost of parts scrapped.

Journal: Internal Sales

Entry:

 

Debit

Credit

Account 688

Adjustment Parts & Accessories Inventory

$1,449

 

Account 242

Inventory Parts & Accessories

 

$1,449