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Sale Of Goods On Approval Or Return Basis
Accountancy
Can Anyone Explain This..?
Answers (5)
Best Answer
Q6. When you record a return of goods sold on sale or return basis we record it at cost in journal entry. ie) sale value of goods = cost of goods + profit Here the cost of a car is 55000 and it's sale value is 75000 So profit is 20000 In this case question the trader sells 2 cars So cost of 2 cars is 110000 (55000Ã?2)
Dharshini Sankar
Q6. When you record a return of goods sold on sale or return basis we record it at cost in journal entry. ie) sale value of goods = cost of goods + profit Here the cost of a car is 55000 and it's sale value is 75000 So profit is 20000 In this case question the trader sells 2 cars So cost of 2 cars is 110000 (55000Ã?2)
Sorry I made a mistake Just don't read first two lines of my previous reply instead read this. How do treat goods lying with customer without approval at the end of the year?? Sales Account Dr. [Invoice price] To Trade receivables / Customers Account These goods should be considered as Inventories with customers and in addition to the above, the following adjustment entry is to be passed: Inventories with Customers on Sale or Return Account Dr. To Trading Account [Cost price or market price whichever is less] Cost is 55000 sale price is 75000 & profit is 20000 as per this question
Thread Starter
Vamsi SAlso This..?
Apply same logic as before for this question Here out of sale value of goods of 60000, goods of worth 16000 at sales value is returned. Cost price of goods returned is 8000 which is already included in inventory so we don't have to include it again in closing stock. While goods worth 12000 (sales value) is still with customer wating for his approval. So we must include these goods in closing stock at cost price ie) 6000 So answer is 6000
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