accruals

Hi

Can anyone confirm what you'd do in the following real life situation:

order is placed for some handmade goods in Feb. No money is taken. Goods are made in April. Money is sent in May. Goods despatched May.

So should this be an accrual - taken as when the order is placed?

thanks,

Shell

Comments

  • Clintm15Clintm15 Well-Known FarehamRegistered Posts: 233
    edited November 2014
    Whether it is an accrual or not very much depends on when the year end is. In real life situations we would normally work from the invoice date.
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  • stevefstevef Well-Known CarmarthenRegistered Posts: 258
    The important date is the date the goods are received, the date you take ownership and accept risk. But if that date can not be ascertained for any reason, invoice date makes a reasonable proxy.
  • shellsbookshellsbook Registered Posts: 12
    Thanks both. That's what I thought but I wasn't sure.
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