17 December 2009
WHETHER SALES RETURNS AND CREDIT NOTES ISSUED FOR EARLIER YEAR SALE FOR WRONG BILLING, RATE DIFFERENCE WOULD BE ADJUSTED IN CURRENT YEAR'S SALE AFTER LAST YEAR'S BALANCE SHEET HAS BEEN FINALISED? WHAT ARE THE CONCERNED IAS REGARDING THIS?
22 December 2009
Dear, there are many reasons for return of goods other than on sale on approval. Anyway, when the goods are sold on approval, at the year end, while finalising the a/cs, you need to pass the following two entries : Sales A/c Dr. XX (at selling price) To DFebtors A/c XX (only if included in sales) Stock on Approval A/c Dr. XX (at cost) To Trading A/c XX You should not finalise the accounts without passing these two entries. As far as rate difference is concerned, if it was known upto the date of finalisation of A/c, it will go to related year,s P/l A/c else will be taken in the current period.As far as wrong billing is concerned, it is an error. Apply AS 5. Regards, CA Shakuntala Chhangani
CAclubindia
