Question:
For example if stock is received from the supplier on 31st december 2006. Invoice for the same is received on 2nd january 2007. How will this recorded in the financial statement prepared for the year ended 31st december 2006
Answer:
As long as the rewards and risks of the inventory have been substantially transferred to the entity it should be recorded as an asset in the balance sheet as of year end and a liability account recorded on the liability side of the balance sheet .
According to GAAP it should be on the balance sheet for 12/31/06.
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