FoThe realisation concept determines when good sent on credit to customers are to be included in the sales figure for the purpose of computing the profit or loss for the account period. Which of the following tends to be used in practice to determine went to include at transaction in the sales figure for the period. When the goods have been1. Dispatched2. Invoiced 3. Delivered4. Paid for?

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FoThe realisation concept determines when good sent on credit to customers are to be included in the sales figure for the purpose of computing the profit or loss for the account period. Which of the following tends to be used in practice to determine went to include at transaction in the sales figure for the period. When the goods have been
1. Dispatched
2. Invoiced
3. Delivered
4. Paid for?

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Realisation Concept and Determining Sales Figure
The realisation concept is an accounting principle that determines when revenue from sales should be recognized in the financial statements. It is crucial in determining the sales figure for a particular accounting period. There are various methods that can be used to determine when a transaction should be included in the sales figure, such as when the goods have been dispatched, invoiced, delivered, or paid for.

Methods to Determine Inclusion in Sales Figure

1. Dispatched
- When goods are dispatched, it means they have been sent out to the customer.
- This method recognizes revenue at the point when the goods leave the seller's premises.
- It is commonly used in practice for determining sales figures.

2. Invoiced
- When goods are invoiced, it means that a bill has been sent to the customer for the goods purchased.
- Revenue is recognized when the invoice is raised, even if the payment has not been received.
- This method is widely used in practice for determining sales figures.

3. Delivered
- When goods are delivered, it means they have reached the customer's location.
- Revenue is recognized at the point of delivery, irrespective of payment status.
- This method is also commonly used in practice to determine sales figures.

4. Paid for
- When goods are paid for, it means that the customer has settled the invoice and made the payment.
- Revenue is recognized when the payment is received.
- While this method is straightforward, it is less commonly used in practice for determining sales figures.
In conclusion, the methods of dispatch, invoicing, delivery, and payment are commonly used in practice to determine when to include a transaction in the sales figure for a particular accounting period. Each method has its merits and is chosen based on the specific circumstances of the business transaction.

Answered by Notes Wala · View profile

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