Given below are the following informations of B.S. Ltd. (i) Goods of 50,000 were sold on 18-03-2024 but at the request of the buyer these were…

As per AS 9 “Revenue Recognition”, in a transaction involving the sale of goods, performance should be regarded as being achieved when the following conditions are fulfilled: (i) the seller of goods has transferred to the buyer the property in the goods for a price or all significant risks and rewards of ownership have been transferred to the buyer and the seller retains no effective control of the goods transferred to a degree usually associated with ownership; and (ii) no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of the goods. Case (i) The sale is complete but delivery has been postponed at buyer's request. B.S. Ltd. should recognize the entire sale of 50,000 for the year ended 31st March, 2024. Case (ii) In case of consignment sale revenue should not be recognized until the goods are sold to a third party.20% goods lying unsold with consignee should be treated as closing inventory and sales should be recognized for 1,00,000 (80% of 1,25,000). Case (iii) In case of goods sold on approval basis, revenue should not be recognized until the goods have been formally accepted by the buyer or the buyer has done an act adopting the transaction or the time period for rejection has elapsed or where no time has been fixed, a reasonable time has elapsed. Therefore, revenue should be recognized for the total sales amounting - 1,00,000 as the time period for rejecting the goods had expired. Thus, total revenue amounting - 2,50,000 (50,000 + 1,00,000 + 1,00,000) will be recognized for the year ended 31st March, 2024 in the books of B.S. Ltd.