Purchase Order and Accounting Cut-offs
by Nicol
(Surrey BC)
Purchase Orders
I have a P.O# dated for the last day of the month and product will not be received until the first do I enter the inventory and costs and GST on this before received?
Hi Nicol,
As you know, a purchase order is a contract between a customer (you) and a supplier to purchase goods and/or services under stated terms and conditions.
It is a committment to purchase. Goods have not been received nor paid at this point therefore no additonal processing/paperwork is required at monthend.
If the amount committed was material and financial statements were being prepared, say at year-end, I would probably include a note disclosing the financial committment.
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