Ans goods sold when returned by the purchaser are

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Ans. Goods sold when returned by the purchaser are termed as Sales Return or Returns Inward. Q.18. Define stock(Inventory). Ans. Stock is tangible asset held by an enterprise for the purpose of sale in the ordinary course of business or for the purpose of using it in the production of goods meant for sale. Stock may be: (i) Opening Stock or (ii) Closing Stock. (i) Opening Stock is the stock-in-hand in the beginning of the accounting year. In other words, it is stock-in-hand at the end of the previous accounting year. (ii) Closing Stock is the stock-in-hand at the end of the accounting year. Stock may be of the following kinds: (i) Stock of Goods: Stock of goods in the case of a trading concern comprises stock of goods remaining unsold. In the case of manufacturing concern, it comprises processed goods manufactured for the purpose of sale. It is valued at cost or net realisable value, whicheve r is lower. (ii) Stock of Raw Material: It comprises the stock of raw material used for manufacturing of goods lying unused. For example, stock of cloth to be used for stitching shirts. (iii) Work- in- Progress : It is a stock that is in the process of being finished, i.e., they are partly finished goods. It is valued at an aggregate of cost of raw material used, cost of labour, other production cost, i.e., power, fuel, etc. Q.19. What is Trade Receivables ? Ans. It is the amount receivable for sale of goods or services rendered in the ordinary course of business. Trade Receivables is a sum total of debtors and bills receivable. Q.20. Define Debtor. Ans. Debtor is a person who owes amount to the enterprise against credit sales of goods or services. For examples, when goods are sold to a person on credit that person is called a Debtor because he owes the amount to the enterprise. The amount due is known as debt. Q.21. Define trade receivables. Ans. Trade receivables is the amount receivable against goods sold and services rendered in the ordinary course of business.
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16 Address: Plot No 420, Behind Shopprix Mall, Vaishali Sector 5, Ghaziabad 201010 M: 9999907099, 9818932244 O: 0120-4130999 Website: , Q.22. Define Creditor. Ans. Creditor is a person to whom an enterprise owes amount against credit purchases of goods or services taken. For example, Mohan is a creditor of a firm when goods are purchased from him on credit. Q.23. What is meant by Bills Payable ? Ans. Bills Payable means a Bill of Exchange accepted, the amount of which will be payable on the specified date. It is included in Trade Payables because Bill Payable replaces a creditor. Q.24. Define Goods. Ans. Goods are the physical items of trade. It is a term that applies to all the items making up the sales or purchases of a business. Q.25. Define Cost. Ans. It is the amount of expenditure incurred on or attributable to a specified article, product or activity.
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