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If goods are sold but not delivered to the customer, they will be included in _____
- a)Closing inventory
- b)Sales
- c)Goods in transit
- d)Sales returns
Correct answer is option 'B'. Can you explain this answer?
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If goods are sold but not delivered to the customer, they will be incl...
Once the property (ownership) in goods has been transferred to the buyer, it can be recognised as sales. Hence, goods sold but not delivered can be recognised as Sales as the ownership has been transferred. Possession (delivery) is not a criteria for recognition of sales. It is only the ownership which matters.
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If goods are sold but not delivered to the customer, they will be incl...
Sales vs Goods in Transit
Sales refer to the transaction where goods are sold to the customer and delivered to them. However, if goods are sold but not yet delivered, they are not considered as sales. Instead, they are included in goods in transit.
Goods in Transit
Goods in transit refer to the inventory that has been shipped to the customer but has not yet been delivered. These goods are still in transit, and ownership and risk have not yet passed from the seller to the buyer. Therefore, they are not considered as sales until they are actually delivered to the customer.
Closing Inventory
Closing inventory refers to the inventory that a company has on hand at the end of the accounting period. This includes all the goods that have been purchased or produced but have not yet been sold.
Sales Returns
Sales returns refer to the goods that have been sold to the customer but are later returned due to various reasons such as defects, damages, or dissatisfaction. These goods are deducted from the sales figure, and the company issues a refund or credit note to the customer.
Conclusion
In conclusion, if goods are sold but not delivered, they are not considered as sales. Instead, they are included in goods in transit. Closing inventory refers to the inventory that a company has on hand at the end of the accounting period, and sales returns refer to the goods that have been sold but later returned by the customer.
Sales refer to the transaction where goods are sold to the customer and delivered to them. However, if goods are sold but not yet delivered, they are not considered as sales. Instead, they are included in goods in transit.
Goods in Transit
Goods in transit refer to the inventory that has been shipped to the customer but has not yet been delivered. These goods are still in transit, and ownership and risk have not yet passed from the seller to the buyer. Therefore, they are not considered as sales until they are actually delivered to the customer.
Closing Inventory
Closing inventory refers to the inventory that a company has on hand at the end of the accounting period. This includes all the goods that have been purchased or produced but have not yet been sold.
Sales Returns
Sales returns refer to the goods that have been sold to the customer but are later returned due to various reasons such as defects, damages, or dissatisfaction. These goods are deducted from the sales figure, and the company issues a refund or credit note to the customer.
Conclusion
In conclusion, if goods are sold but not delivered, they are not considered as sales. Instead, they are included in goods in transit. Closing inventory refers to the inventory that a company has on hand at the end of the accounting period, and sales returns refer to the goods that have been sold but later returned by the customer.
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If goods are sold but not delivered to the customer, they will be included in _____a)Closing inventoryb)Salesc)Goods in transitd)Sales returnsCorrect answer is option 'B'. Can you explain this answer?
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