mohan the owner of a business receives an order for supply of goods worth 200000 he has also receive rupee's 25000 against the order mohan wants to record it as a sale is he mohan correct in doing so?
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5
Answer:
yes mohan is correct in doing so
Rimpysharma:
why is he correct ? can u plz explain it?
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0
Explanation:
No, he will not be correct in recording it as sales because the goods have not been delivered as yet and hence the sale is not completed. Mohan has not earned the revenue so far. Under the matching concept, revenue is recognised as earned only when cost incurred to earn that revenue is also recognised as expense in that period.
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