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ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will be
- a)Rs. 12,500
- b)Rs. 8,000
- c)Rs. 10,000
- d)Nil
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
ABC Ltd. sells goods to its approved customers on sale or return basis...
Calculation of Closing Inventory
Sale or Return Basis
ABC Ltd. sells goods to approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. This means that the company records the sale as soon as the goods are sent to the customer, regardless of whether the customer actually buys the goods or returns them.
Goods Sent to Annu Ltd.
On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. However, no confirmation has been received from Annu Ltd. till 31st March, 2012.
Closing Inventory
The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will be Rs. 10,000. This is because the goods sent to Annu Ltd. are treated as actual sales, so they are not included in the closing inventory. The fact that no confirmation has been received from Annu Ltd. does not change the treatment of the sale.
Final Answer
Therefore, the correct answer is option 'C' Rs. 10,000.
Sale or Return Basis
ABC Ltd. sells goods to approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. This means that the company records the sale as soon as the goods are sent to the customer, regardless of whether the customer actually buys the goods or returns them.
Goods Sent to Annu Ltd.
On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. However, no confirmation has been received from Annu Ltd. till 31st March, 2012.
Closing Inventory
The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will be Rs. 10,000. This is because the goods sent to Annu Ltd. are treated as actual sales, so they are not included in the closing inventory. The fact that no confirmation has been received from Annu Ltd. does not change the treatment of the sale.
Final Answer
Therefore, the correct answer is option 'C' Rs. 10,000.
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ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will bea)Rs. 12,500b)Rs. 8,000c)Rs. 10,000d)NilCorrect answer is option 'C'. Can you explain this answer?
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ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will bea)Rs. 12,500b)Rs. 8,000c)Rs. 10,000d)NilCorrect answer is option 'C'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will bea)Rs. 12,500b)Rs. 8,000c)Rs. 10,000d)NilCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will bea)Rs. 12,500b)Rs. 8,000c)Rs. 10,000d)NilCorrect answer is option 'C'. Can you explain this answer?.
ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will bea)Rs. 12,500b)Rs. 8,000c)Rs. 10,000d)NilCorrect answer is option 'C'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will bea)Rs. 12,500b)Rs. 8,000c)Rs. 10,000d)NilCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31st March, 2012 will bea)Rs. 12,500b)Rs. 8,000c)Rs. 10,000d)NilCorrect answer is option 'C'. Can you explain this answer?.
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