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.
P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.
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