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Inventory

Sir in inventory if we purchase in March but we received on April before counting what we do that sir in trading account. if we receive goods after calculating inventory what to do.


Jashwanth S

Jashwanth S

CMA Inter

2K+

05-May-20 08:44

20

Answers (4)

Goods in transit should be included in inventory if the legal ownership is transferred before the cut off date. Counting or quality inspection are secondary. Everything depends on shipping terms, if the legal ownership is transferred before counting then include but if legal ownership transfers only after counting then dont include.


sudha reddy

sudha reddy

Moderator

05-May-20 08:54

OK but we have to record in trading account credit side


Jashwanth S

Jashwanth S

CMA Inter

2K+

05-May-20 08:56

Already we know sales and closing stock only comes in credit side then what we do that transaction


Jashwanth S

Jashwanth S

CMA Inter

2K+

05-May-20 08:58

When a purchase happens you would increase the purchases and if not sold it would be shown as closing stock. Once you have recorded a purchase and accounted for it and because it is not sold you will include it in closing stock. If the stock is not yet received, it will be accounted as stock in transit.


Suraj Lakhotia

Suraj Lakhotia

Admin

05-May-20 09:16

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