A company sells goods on credit valued at Rs. $25000$ to a customer. At what point in the sales cycle should this sale be recognized in the accounts?

When the customer's order is received.

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When the goods are ready for dispatch to the customer.

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When the goods are sent, accepted and invoiced.

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When the customer pays.

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Solution

The correct option is B When the goods are sent, accepted and invoiced.
Revenue is considered to be recognized only when the legal title of the property is being transferred. Hence. sales is recognized only when the goods are physically sent and accepted by the buyer against the invoice.

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A company sells goods on credit valued at Rs. 25000 to a customer. At what point in the sales cycle should this sale be recognized in the accounts?

The correct option is B When the goods are sent, accepted and invoiced.Revenue is considered to be recognized only when the legal title of the property is being transferred. Hence. sales is recognized only when the goods are physically sent and accepted by the buyer against the invoice.

A company sells goods on credit valued at Rs. $25000$ to a customer. At what point in the sales cycle should this sale be recognized in the accounts?

The correct option is B When the goods are sent, accepted and invoiced.
Revenue is considered to be recognized only when the legal title of the property is being transferred. Hence. sales is recognized only when the goods are physically sent and accepted by the buyer against the invoice.