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What Is It Really Mean To Be Our Asset?

Updated: Sep 12, 2022

Accounting Acer Series 3


If you have read our previous series, you already know the meaning of assets is. That it can be owned and can be controlled.


But what happened if there is an issue occurred during the process of transferring the ownership?


It usually happens when there is a sale/purchase transaction between two parties.

For example:


On 10th January 2022, Company A bought ten chairs from Furniture B and made RM10,000 payment in advance.


Furniture B then start preparing the order form for Company A and schedule to deliver them by 15th January 2022.


However, in the process of delivering the chairs, there was a group pf robbers break into the lorry of furniture B and steal all the chairs ordered by Company A.


So, the question is, who is responsible for the loss of the chairs? Company A and Furniture B?


Furniture B is responsible for the loss, as Company A has made an advance payment of RM 10,000 to them. Furniture B is responsible, because the ownership of the assets (chairs) has not been transferred from Furniture B to Company A.


That shows Furniture B is still owning and controlling the assets before the “Delivery Note” is being sent to Company A when the chairs are being stolen.


However, the situation would have been different if the chairs are being stole, after the delivery note is sent from Furniture B and Company B. In other words, Company B will be responsible for that.


Thus, always remember what delivery is note and why is it important.


Don't buta buta kena scam by others you also tak tau ah


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