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Sales for the year ended 31st March, 2010 amounted to Rs. 10,00,000. Sales included goods sold to Mr. A for Rs. 50,000 at a profit of 20% on cost. Such goods are still lying in the godown at the buyer’s risk. Therefore, such goods should be treated as part of
  • a)
    Sales
  • b)
    Closing inventory
  • c)
    Goods in transit
  • d)
    Sales return
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Sales for the year ended 31st March, 2010 amounted to Rs. 10,00,000. S...
's risk.

To calculate the cost of goods sold for the year, we need to exclude the goods sold to Mr. A as they are still in the godown and have not been sold to the end customer.

Cost of goods sold = Total sales - Sales to Mr. A

= Rs. 10,00,000 - Rs. 50,000

= Rs. 9,50,000

Therefore, the cost of goods sold for the year ended 31st March, 2010 is Rs. 9,50,000.
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Community Answer
Sales for the year ended 31st March, 2010 amounted to Rs. 10,00,000. S...
Answer a goods lying in the go down at buyers risk should be treated as sales
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Sales for the year ended 31st March, 2010 amounted to Rs. 10,00,000. Sales included goods sold to Mr. A for Rs. 50,000 at a profit of 20% on cost. Such goods are still lying in the godown at the buyer’s risk. Therefore, such goods should be treated as part ofa)Salesb)Closing inventoryc)Goods in transitd)Sales returnCorrect answer is option 'C'. Can you explain this answer?
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