06-27-2007, 06:40 PM
Dear,
I cannot understand this question. If goods were received in Dec 2001 then why these were entered in purchase register in Jan 2002? Is it some rectification of error sort of question?
If these goods were received in Dec 2001 then we have to look on the terms of purchase. Either these were cash purchases or credit purchases? If these were cash purchases then these should have been accounted for in Dec 2001. You can get the reasoning from IAS-1 and IAS-18 for doing so.
However, if these goods were purchased on credit then we have to base our conclusion on terms of acceptance of goods. Whether the receiving of goods is sufficient to create an obligation against such purchases or such goods have to undergo some inspection, testing and approval procedures afetr which these could either be accepted or rejected. If the later is the case and these procedures were not completed in Dec 2001, then goods could be concluded under the process of approval during Dec 2001. In such case these could be accounted for in Jan 2002 on final approval, the event authorizing the accouning of such transaction. Reliance could be made on the stipulations of IAS-1, IAS-2, IAS-18 and to some extent on IAS-37.
However, if nothing i clarified in question, then it should be concluded as cash purchase and be accounted for in Dec 2001.
Regards,
I cannot understand this question. If goods were received in Dec 2001 then why these were entered in purchase register in Jan 2002? Is it some rectification of error sort of question?
If these goods were received in Dec 2001 then we have to look on the terms of purchase. Either these were cash purchases or credit purchases? If these were cash purchases then these should have been accounted for in Dec 2001. You can get the reasoning from IAS-1 and IAS-18 for doing so.
However, if these goods were purchased on credit then we have to base our conclusion on terms of acceptance of goods. Whether the receiving of goods is sufficient to create an obligation against such purchases or such goods have to undergo some inspection, testing and approval procedures afetr which these could either be accepted or rejected. If the later is the case and these procedures were not completed in Dec 2001, then goods could be concluded under the process of approval during Dec 2001. In such case these could be accounted for in Jan 2002 on final approval, the event authorizing the accouning of such transaction. Reliance could be made on the stipulations of IAS-1, IAS-2, IAS-18 and to some extent on IAS-37.
However, if nothing i clarified in question, then it should be concluded as cash purchase and be accounted for in Dec 2001.
Regards,
