Goods sent on sale or return basis
Querist : Anonymous
1) what is the basic accounting treatment for goods sold on sale or return basis ?
2 ) If goods are approved by debtor before the closer of the books, what would be accounting treatment ?
3) And what would be the accounting treatment if goods are lying with debtor, not approved by debtor before closer of books.
Awaiting for experts' and others' opinion.
Thax.
1. Goods delivered to the customer.
2. All risk and rewards passes to the cust.
3. Goods accept by the customer.
4. There exist no uncertainty regarding
collection of receipts.
So if at the time of books closing the goods not accpt by the customer will be shown as "goods ling with the customer A/c" and will not be treated as sale of goods.
Cheers now
Querist : Anonymous
bt, wht would be d accounting entries in both cases ??
Querist : Anonymous
(1) When goods are sold on Approval basis
Party name Dr
To Goods sold on approval basis A/c
(2) When the goods are approved
Goods sold on approval basis A/c DR
To SAles A/c
(3) When the goods sold is not approved on the closing date
Closing Stock-Goods sold on approval basis A/c DR
To Goods sold on approval basis A/c
(4) transfering the closing stock to Trading & Profit & Loss A/c
Trading / Profit & Loss A/c DR
To Closing Stock-Goods sold on approval basis A/c
I hope you clear write here for any doubt
Querist : Anonymous
i got the point.
Thank you sir.
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