what adjustment should be made to the financial statement?

this is not actually sale for this year means 0ct 2006..
this sales will be recorded in next year as debtor accepted half of goods in Nov and Nov is after this year end!!!

so reverse the entries made..
sales return dr
receivables cr

inventory will be increased..

there is concept of consignment ..

@bellanna said:
hi everyone:
please help me on this from F3 note (from this website) charpter 15 Test Que4:

In Oct 2006 James sold some goods on sale or reture terms for 2500.Their cost to james was 1500,The transction has been treated as a credit sale in his financial statement for the yr end 31 oct 2006. In Nov 2006,the customer accepted half of the goods and returned the other half in good condition. what adjustment should be made to the financial statement?

The answer is
Sales and receivable should be reduced by 2500, and the closing invertory increased by 1500.

Why????

I think it’s better to make a provision for such goods that likely will be return in next year. when a seller make a sale to his customer and reserves a right for the customer to return the goods, firstly the event of sale is completed and secondly he has a present obligation based on the reserved right of returning the goods by the customer. so I think the return of goods in November could be an extra evidence as a adjustment event for recognition a provision for returning of goods by customer.
my opinion about this explanation is based on the ” sold ” as a key word in threshold of the question.in other word I think there is a difference between ” delivered for choosing ” and ” sold with reserved right to return “.