🎴 Flashcard Mode
Methods to prepare accounts - class-IX
Card1 / 115
Mastered0
Review0
QuestionClick to flip
A company sends its cars to dealers on sale or return basis. All such transactions are, however, treated like actual sales and are passed through the sales day book. Just before the end of the financial year, two cars which had cost Rs 50,000 each have been sent on 'sale or return' and have been debited to customers at Rs 80,000 each. Cost of goods lying with the customers will be _______________.
AnswerClick to flip back
A
Rs 1,00,000
💡 Explanation:
The cars sent on sale or return are still inventory of the company until the customer accepts them. They must be valued at cost. Since there are 2 cars at Rs 50,000 cost each, the total value is Rs 1,00,000.