Goods:
Goods refer to merchandise, commodities, products, articles or things in which a trader deals. In other words, they refer to commodities or things meant for resale. For example, for a stationery merchant, stationery articles like books, pens, pencils, etc., are his goods, for a furniture dealer, furniture, such as tables, chairs, benches etc., are his goods, for a cloth merchant, cloths are his goods.
In the context of goods, it may be noted that, if a single account called 'goods account' or 'stock account' is maintained for all the transactions relating to goods, it will not serve any useful purpose. The goods account will not give separate information of each type of movement of goods, and the Balance of goods account will not show the stock-in-hand. So, the goods account is, generally divided into six heads, viz., purchases account, sales account, purchases returns account, sales returns account, opening stock account and closing stock account. Each of the first four accounts shows a particular type of movement of goods, and each of the last two accounts shows the stock-in-hand as on a particular date. So, it is necessary to have some idea about the various sub-divisions of goods or goods account.
(a) Purchases:
Goods purchased by a business are called purchases.
(b) Sales:
Goods sold by a business are called sales.
(c) Purchases Returns, Returns Outwards or Returns to Suppliers:
Goods returned by a business to its suppliers (i.e., sellers) out of the purchases already made from them are called purchases returns, returns outwards or returns to suppliers.
(d) Sales returns, Returns Inwards or Returns from Customers:
Goods returned to a business by its customers (purchasers) out of the sales already made to them are called sales returns, returns inwards or returns from customers.
(e) Opening Stock:
Unsold goods lying in a business at the beginning of any given period, say, at the beginning of a year, are called opening stock.
(f) Closing Stock:
Unsold goods lying in a business at the end of any given period, say, at the end of a year, are called closing stock.
Goods refer to merchandise, commodities, products, articles or things in which a trader deals. In other words, they refer to commodities or things meant for resale. For example, for a stationery merchant, stationery articles like books, pens, pencils, etc., are his goods, for a furniture dealer, furniture, such as tables, chairs, benches etc., are his goods, for a cloth merchant, cloths are his goods.
In the context of goods, it may be noted that, if a single account called 'goods account' or 'stock account' is maintained for all the transactions relating to goods, it will not serve any useful purpose. The goods account will not give separate information of each type of movement of goods, and the Balance of goods account will not show the stock-in-hand. So, the goods account is, generally divided into six heads, viz., purchases account, sales account, purchases returns account, sales returns account, opening stock account and closing stock account. Each of the first four accounts shows a particular type of movement of goods, and each of the last two accounts shows the stock-in-hand as on a particular date. So, it is necessary to have some idea about the various sub-divisions of goods or goods account.
(a) Purchases:
Goods purchased by a business are called purchases.
(b) Sales:
Goods sold by a business are called sales.
(c) Purchases Returns, Returns Outwards or Returns to Suppliers:
Goods returned by a business to its suppliers (i.e., sellers) out of the purchases already made from them are called purchases returns, returns outwards or returns to suppliers.
(d) Sales returns, Returns Inwards or Returns from Customers:
Goods returned to a business by its customers (purchasers) out of the sales already made to them are called sales returns, returns inwards or returns from customers.
(e) Opening Stock:
Unsold goods lying in a business at the beginning of any given period, say, at the beginning of a year, are called opening stock.
(f) Closing Stock:
Unsold goods lying in a business at the end of any given period, say, at the end of a year, are called closing stock.
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