Month end sales
This query is : Resolved
01 January 2011
hi,
I have doubt, as to when to account for sale of goods in the month end.
e.g if the invoice is dated 30th Nov but dispatch has actaully happened on 5th Dec.
The accounting of sales was done on 30th nov itself to show more turnover.
Further sale is not on ex-works basis (i.e.here seller is bearing freight)
as far as i know since the intention here is to book more revenue and also CIF basis i think it should be accounted on Dec 5th.
Am i right?
Kindly reply....
I have doubt, as to when to account for sale of goods in the month end.
e.g if the invoice is dated 30th Nov but dispatch has actaully happened on 5th Dec.
The accounting of sales was done on 30th nov itself to show more turnover.
Further sale is not on ex-works basis (i.e.here seller is bearing freight)
as far as i know since the intention here is to book more revenue and also CIF basis i think it should be accounted on Dec 5th.
Am i right?
Kindly reply....
01 January 2011
Hi
as per the excise or sales tax act
once the invoice is generated with in 24 hours you shoud remove the goods from your premises.
other wise it shows that doing tax eavision or turnover declining.
please considerd the invoice date
as per the excise or sales tax act
once the invoice is generated with in 24 hours you shoud remove the goods from your premises.
other wise it shows that doing tax eavision or turnover declining.
please considerd the invoice date
01 January 2011
thanks for reply.
can you tel me when should revenue be recognized
can you tel me when should revenue be recognized
02 January 2011
i am not sure what excise and st act rules. but for a/cing purposes, there is nothing wrong in recognising the revenue in Nov itself, provided the goods sold are earmarked as 'sold but not despatched' and not taken for month end closing stock valuation
02 January 2011
but sir AS9 says risk should also be transfered for recognizing revenue,here it is CIF basis.
(Note:the query is open)
(Note:the query is open)
02 January 2011
AS applies for year end. For month end, nothing wrong if you adopt the above proc.
02 January 2011
even if it is a listed company, will AS apply only in year end.
02 January 2011
that means inconsistency in recognizing revenue can be made until year ends.
Then how is accounting policy are in line??
Then how is accounting policy are in line??
02 January 2011
if your materail not moved within 24HRs information will be submmited to Excise Department. now you are doing worng procidure. but sale to be booked at the time of movment of material.
02 January 2011
Generally year end positions are reviewed by the Auditors. Quarter end, in case of Listed Companies, involves no audit. As has been observed from AS9, there is no wrong in treating Sales in Nov. specifically since the invoices are raised and goods are appropriated as i have already replied.
We can also argue, i guess, that once as per order of the buyer, goods are specifically appropriated and invoiced to the buyer, the risk in goods have passed to the buyer. We must prove that goods appropriated seperately for the buyer against the spec. inv. and spec. order.
Then there is also AS4 'Events Occuring after Balance Sheet' wherein it has been specifically allowed to recognise gain if event is certain.
Pl also consider replies of other learned experts in regard to Excise etc.,
We can also argue, i guess, that once as per order of the buyer, goods are specifically appropriated and invoiced to the buyer, the risk in goods have passed to the buyer. We must prove that goods appropriated seperately for the buyer against the spec. inv. and spec. order.
Then there is also AS4 'Events Occuring after Balance Sheet' wherein it has been specifically allowed to recognise gain if event is certain.
Pl also consider replies of other learned experts in regard to Excise etc.,
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