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Hello sir.
When is purchase recorded in the account. Is it just after issuing purchase order or after preparing GRN? And when is the payable booked? Is it just after preparing GRN or receiving purchase invoice? And same question in sales cycle for recording sale and revenue.How and when transactions and events are recorded in financial statements is assumed knowledge of Financial Accounting (FA/F3).
It is fundamental to double entry bookkeeping that expense/payable and revenue/receivable are booked simultaneously.
Invoices are recorded in the sales and purchase day books. These are the books of prime entry which are are posted to the ledger accounts from which the financial statements are prepared.
(GRNs/GDNs couldn’t be recorded in daybooks for posting to ledger accounts because they show only quantities of goods – not $ amounts. Also, there are no GRNs/GDNs for services as opposed to goods.)
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