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Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis . Goods worth 25000 we're still pending with customer on 31/3 remind good accepted by customer. How would you deal with good lying with customer as on 31/3 assuming good invoice on 25•/• above cost price?
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Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis...
Dealing with Goods on Sale or Approval Basis
Background: Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis. The goods worth 25000 were still pending with the customer on 31/3.
Reminder: The goods were accepted by the customer, as per the reminder on 31/3.
Steps to be taken:
1. Record the transaction: The first step is to record the transaction in the books of accounts. The transaction should be recorded on 25/3 when the goods were sent on sale or approval basis.
2. Account for the goods lying with the customer: As on 31/3, goods worth 25000 were still lying with the customer. These goods should be accounted for separately in the books of accounts. The goods should be recorded as accounts receivable, as the customer has accepted the goods and has an obligation to pay for them.
3. Invoice the customer: An invoice should be raised on the customer for the goods lying with them. The invoice should be raised on the cost price of the goods, as mentioned in the question.
4. Maintain a record of the goods: A record should be maintained of the goods lying with the customer. This will help in tracking the goods and ensuring that they are returned within the agreed timeline.
5. Follow-up with the customer: The customer should be followed up to ensure that the goods are returned within the agreed timeline. If the customer fails to return the goods within the agreed timeline, then the goods should be treated as sold.
6. Account for the sale: If the goods are treated as sold, then they should be accounted for as sales in the books of accounts. The sales should be recorded at the cost price of the goods.
Conclusion: Dealing with goods on sale or approval basis requires careful accounting and tracking. The steps mentioned above should be followed to ensure that the goods are accounted for correctly and the business is not exposed to any undue risks.
Background: Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis. The goods worth 25000 were still pending with the customer on 31/3.
Reminder: The goods were accepted by the customer, as per the reminder on 31/3.
Steps to be taken:
1. Record the transaction: The first step is to record the transaction in the books of accounts. The transaction should be recorded on 25/3 when the goods were sent on sale or approval basis.
2. Account for the goods lying with the customer: As on 31/3, goods worth 25000 were still lying with the customer. These goods should be accounted for separately in the books of accounts. The goods should be recorded as accounts receivable, as the customer has accepted the goods and has an obligation to pay for them.
3. Invoice the customer: An invoice should be raised on the customer for the goods lying with them. The invoice should be raised on the cost price of the goods, as mentioned in the question.
4. Maintain a record of the goods: A record should be maintained of the goods lying with the customer. This will help in tracking the goods and ensuring that they are returned within the agreed timeline.
5. Follow-up with the customer: The customer should be followed up to ensure that the goods are returned within the agreed timeline. If the customer fails to return the goods within the agreed timeline, then the goods should be treated as sold.
6. Account for the sale: If the goods are treated as sold, then they should be accounted for as sales in the books of accounts. The sales should be recorded at the cost price of the goods.
Conclusion: Dealing with goods on sale or approval basis requires careful accounting and tracking. The steps mentioned above should be followed to ensure that the goods are accounted for correctly and the business is not exposed to any undue risks.
Community Answer
Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis...
(-)25000 from sales and debtors & (+) 20000 to closing stock
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Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis . Goods worth 25000 we're still pending with customer on 31/3 remind good accepted by customer. How would you deal with good lying with customer as on 31/3 assuming good invoice on 25•/• above cost price?
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Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis . Goods worth 25000 we're still pending with customer on 31/3 remind good accepted by customer. How would you deal with good lying with customer as on 31/3 assuming good invoice on 25•/• above cost price? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis . Goods worth 25000 we're still pending with customer on 31/3 remind good accepted by customer. How would you deal with good lying with customer as on 31/3 assuming good invoice on 25•/• above cost price? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis . Goods worth 25000 we're still pending with customer on 31/3 remind good accepted by customer. How would you deal with good lying with customer as on 31/3 assuming good invoice on 25•/• above cost price?.
Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis . Goods worth 25000 we're still pending with customer on 31/3 remind good accepted by customer. How would you deal with good lying with customer as on 31/3 assuming good invoice on 25•/• above cost price? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis . Goods worth 25000 we're still pending with customer on 31/3 remind good accepted by customer. How would you deal with good lying with customer as on 31/3 assuming good invoice on 25•/• above cost price? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Mr A sent goods casually worth 50000 on 25/3 on sale or approval basis . Goods worth 25000 we're still pending with customer on 31/3 remind good accepted by customer. How would you deal with good lying with customer as on 31/3 assuming good invoice on 25•/• above cost price?.
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