Question

Goods sold on approval basis are recorded as sales by the seller:

• A. Immediately after the goods are dispatched.
• B. Only when the buyer approves or accepts the goods.
• C. As soon as payment is received in advance.
• D. When the goods are packed for delivery.

Hint:

Ask when the buyer finally agrees to buy the goods sent on trial.

Answer 1

The Correct Option is B

Step 1: Understand the term:
In a sale on approval, the seller sends goods to the buyer for trial. The buyer may keep the goods or send them back.

Step 2: Recall when the sale is complete:
Here the buyer has not yet agreed to buy. The sale becomes final only when the buyer approves, accepts, or keeps the goods beyond the time allowed without returning them.
Until then the goods still belong to the seller, and they are counted as the seller's stock.

Step 3: Check option (A):
Dispatch only means the goods have been sent for trial. The buyer may reject them. So (A) is wrong.

Step 4: Check option (B):
A sale is recorded only when the buyer approves or accepts the goods. So (B) is correct.

Step 5: Check option (C):
Receiving an advance does not change the nature of the deal. The goods are still on trial, and the buyer may return them. So (C) is wrong.

Step 6: Check option (D):
Packing is just a step in preparing the goods for dispatch. No sale takes place at that point. So (D) is wrong.

Final Answer:
The seller records the sale only when the buyer approves or accepts the goods. This is option (B). \[ \boxed{\text{Option (B): Only when the buyer approves or accepts the goods}} \]