revenue shouldn’t been recognized adjustments

Home Forums ACCA Forum F7 Financial Reporting Forums revenue shouldn’t been recognized adjustments

This topic contains 1 reply, has 2 voices, and was last updated by Avatar of Sangria9 Sangria9 1 year, 4 months ago. This post has been viewed 27 times

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts

  • Avatar of KeshaM
    KeshaM
    Participant
    • Topics: 9
    • Replies: 33

    Hi everyone,
    I am a bit of confused about adjustments for revenue shouldn’t be recognized. I know it should be deducted from revenue and added back to inventory (- profit) but what happens with COS? thanks


    Avatar of Sangria9
    Sangria9
    Moderator
    • Topics: 20
    • Replies: 205

    If it is for example sale on return basis before the year end, you need
    to decrease revenue for sales amount in I/S
    to decrease COS for amount of inventory sold under this agreement in I/S
    to increase inventory in SOFP for amount of inventory sold
    if this sale haven’t been paid for, entity should eliminate trade receivables for sales amount in SOFP

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.