Question

Consider the following statements :
1. According to the Companies Act 2013, 'goods-in-transit' shall not be disclosed under the sub-head of inventories.
2. The new Company Act 2013 says that 'goods-in-transit' shall also be shown as an inventory.
3. New Company Act 2013 describes that the mode of valuation of 'goods-in-transit' shall also be disclosed.
Which of the above statement/s is/are correct?

• A. Only 3
• B. Only 1
• C. 2 and 3
• D. 1 and 2

Answer 1

The correct option is C 2 and 3

Goods in transit means the goods that have left the sellers place of business and have not reached the buyers place of business. As per the provisions of the companies act 2013 goods in transit should be recorded in the inventory if the legal title has been passed by the seller to the buyer and also their valuation should be disclosed by the company in the notes.