[sheenbean8]

A company just completed a physical inventory count at year-end, December 31. Items were counted and costed on a FIFO basis. The inventory amounted to $40,000. The following information was not included in the inventory amount.

(b) A customer purchased goods for cash amounting to $2,650, but the amounts were not delivered until the next year. The cost of the goods for the company were $1,300, and that amount was included in the physical inventory count.


For this case, since the goods have not been delivered would I decrease (1,300) from the inventory to rectify it?

[paraclete]

It would be more appropriate to adjust the sales account for income received in advance. As the goods had not beeen delivered they were correctly counted as part of inventory