Perdisco Assignment ( Technology Boutique Practice Set) Query (1 Viewer)

[Red_John]

Ok i'm just a bit unsure of how to handle a sales order.

It says on 17th June i received a sales order to deliver xyz product to abc company for $4000 each, invoice no 100.

On the 24th it then says we delivered the items.

Would i do nothing for the 17th transaction and just record a credit sale through the sales journal on the 24th?

Cheers

 

[Equity]

what do you think newbs?

I got 93 for accounting 1A at unsw last semester, I am pro at this shit man

 

[Red_John]

what do you think newbs?

I got 93 for accounting 1A at unsw last semester, I am pro at this shit man

Your reply indicates that you haven't read the last line of my post. "Would i do nothing for the 17th transaction and just record a credit sale through the sales journal on the 24th", and you have indicated that you have a high level of ability with accounting but you haven't posted a reply with relevence or substance.

Care to impart some of your expertise in accounting to answer my question?

 

[kaz1]

credit sale on the 17th

 

[Reserves]

credit sale on the 17th

Can't tell whether he is trolling or just fucking stupid.

Also, fuck yeah. I just got accounting 1B midsemester back. Got 28 (it's either out of 30 or 32 , not sure what it's out of, but it's still fucking mad!).

You are correct OP, it is recorded as a credit sale when the goods are delivered , I was just screwing with you before lol

 

[Red_John]

Can't tell whether he is trolling or just fucking stupid.

Also, fuck yeah. I just got accounting 1B midsemester back. Got 28 (it's either out of 30 or 32 , not sure what it's out of, but it's still fucking mad!).

You are correct OP, it is recorded as a credit sale when the goods are delivered , I was just screwing with you before lol

Ok cool thanks, i just wanted to make sure.

 

[seremify007]

If you wanted to be a real smart ass about this you could argue that revenue recognition depends on when the significant risks and rewards are transferred to abc company in accordance with AASB 118 para. 14-15. From the information provided it's not clear when the goods are actually being shipped out from the entity's factory/warehouse (i.e. the transfer of risks and reward) because a sales order request does not necessarily constitute a transaction or legally enforceable contract. Furthermore, if you were to look at the SAC 4 definition of an asset, has the right to the receivable really been raised yet as at 17th?

Therefore if it were me, I would be recognising the sale on the 24th (assuming that's when we shipped the items thus transferring risk & reward, and it was delivered same day)- that is, I would recognise the revenue (i.e. Dr Liability, Cr Sales Revenue) with a corresponding (and 'matching' principle) recognition of the expense (i.e. Dr COGS, Cr Inventory).]

The only other option I suppose is if you received cash or have previously received cash from the customer, then you could argue Dr Cash, Cr Unearned Revenue (Liability).