How to do cut off checking
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
15 November 2011
Hi
1) In case of purchases how to apply cut off?
i.e. a)whether on basis of invoice date
b)when goods enter the factory gate c) when they are finally accepted and enter into purchase register. or any other method?
1) In case of purchases how to apply cut off?
i.e. a)whether on basis of invoice date
b)when goods enter the factory gate c) when they are finally accepted and enter into purchase register. or any other method?
CA Neha Jain
(Expert)
18 November 2011
Purchases -
1. The GRN date in case of term of purchase are CIF, door delivery etc. it means goods will be delivered by the vendor at clients factory gate.
2. The despatch date from the vendor's factory where the terms are ex-factory. if goods not reached to the client on cutoff date they should be shown as goods-in-transit.
Sales -
1.For terms ex-factory - clients delivery challan date will be considered for cutoff
2. for CIF terms - the date goods reach to the client will be the cutoff date.
In short, we need to verify the terms of sales and purchase to identify when the risk and rewards related to the goods transferred to client in case of purchases and to customer in case of sales.
1. The GRN date in case of term of purchase are CIF, door delivery etc. it means goods will be delivered by the vendor at clients factory gate.
2. The despatch date from the vendor's factory where the terms are ex-factory. if goods not reached to the client on cutoff date they should be shown as goods-in-transit.
Sales -
1.For terms ex-factory - clients delivery challan date will be considered for cutoff
2. for CIF terms - the date goods reach to the client will be the cutoff date.
In short, we need to verify the terms of sales and purchase to identify when the risk and rewards related to the goods transferred to client in case of purchases and to customer in case of sales.
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