Master ACCA F8 Audit & Assurance 2025 – Ace It with Confidence and Style!

The correct answer pertains to the timing of revenue recognition in relation to the conditions of inventory count. When goods are dispatched after the inventory count, they have not yet been sold in the accounting period and, therefore, should not be included in the profit and loss statement for that period. Revenue is typically recognized when the risks and rewards of ownership have transferred to the buyer, which usually happens when goods are dispatched, not after.

In contrast, sales invoices for goods sold at a discount are still valid transactions that contribute to revenue, despite the price reduction. Similarly, invoices for goods dispatched before an inventory count are included because the goods have been shipped out, despite the timing of the inventory count. Lastly, even when goods are returned, there is an adjustment to sales figures in the profit and loss statement; thus, these transactions are usually reflected in adjusting entries rather than being excluded entirely.

Understanding when to recognize revenue in relation to the shipping and inventory counting process is crucial in accurate financial reporting and ensuring compliance with accounting standards.