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*COMPLEX* COGS and liability accounts with sales transactions
Hello, everyone.
I have a particularly hairy accounting question.
Our company sells custom-made men's dress shirts, and as a result our accounting is very strange. When we make a sale, we receive the cash ~2 weeks in advance of the goods shipping, and therefore have to recognize a liability in "unshipped product" on our balance sheet. Also, we receive a bill from our manufacturing partner at end of the month rather than when they make the shirt (and the COGS should have been recognized when the shirt was made and the sale was shipped), and we create a payable as the offsetting transaction.
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