Accrual vs Good In transit
Tracy1265
Registered Posts: 1
Hello
If services or goods have been provided but not invoiced in the current period do you
a) accrue for the Income (will be invoiced next period)
b) deal the deliveries as good in transit and amend the stock evaluation (goods have been delivered and signed for up to 2 weeks ago)
My knowledge and experience points me to a) but i'm being told b)
Are we both right?
If services or goods have been provided but not invoiced in the current period do you
a) accrue for the Income (will be invoiced next period)
b) deal the deliveries as good in transit and amend the stock evaluation (goods have been delivered and signed for up to 2 weeks ago)
My knowledge and experience points me to a) but i'm being told b)
Are we both right?
Comments
Ideally, you want to match the sale with the cost of the original purchase
So I wouldn't include the goods in the closing stock figure
That way the price of the goods would be in cost of goods sold
And I would accrue the sale so that the purchase and sale are declared in the same period
This should then enable accounts to be produced with the correct gross profit margin/mark-up