{"id":54336,"date":"2024-04-16T00:08:27","date_gmt":"2024-04-16T00:08:27","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=54336"},"modified":"2024-04-16T00:08:27","modified_gmt":"2024-04-16T00:08:27","slug":"if-goods-worth-rs-10000-are-sold-on-the-basis-of-sale-on-approval-the-adjustment-of-this-transaction-on-the-date-of-accounting-is-done-in","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/if-goods-worth-rs-10000-are-sold-on-the-basis-of-sale-on-approval-the-adjustment-of-this-transaction-on-the-date-of-accounting-is-done-in\/","title":{"rendered":"If Goods worth Rs. 10,000 are sold on the basis of sale on approval, the adjustment of this transaction on the date of accounting is done in"},"content":{"rendered":"

[amp_mcq option1=”Sales” option2=”Stock” option3=”Debtors” option4=”All of the above” correct=”option4″]<\/p>\n

The correct answer is D. All of the above.<\/p>\n

When goods are sold on the basis of sale on approval, the seller retains ownership of the goods until the buyer accepts them. This means that the seller does not record the sale as revenue until the buyer accepts the goods. In the meantime, the seller records the sale as a “sale on approval” and includes the goods in inventory.<\/p>\n

When the buyer accepts the goods, the seller records the sale as revenue and removes the goods from inventory. The seller also records an account receivable for the amount owed by the buyer.<\/p>\n

Therefore, the adjustment of this transaction on the date of accounting is done in sales, stock, and debtors.<\/p>\n