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A Contract of Sale, also known as a Bill of Sale, is a legal contract that deals with an exchange of goods, services or property from seller to the buyer for a value that they have agreed upon. This agreed value in money, or equivalent barter-able object, is either paid at the time of the transaction or at a later date agreed upon by the two parties, namely vendor and purchaser. Just like a contract that is signed between an employer and an employee, it is a legally binding document that, if broken in any way by either side, can result in court action. However, many of these Contracts of Sale carry clauses that are in place in case of possible eventualities, all in an effort to avoid legal action.
For example, Jeff’s Groceries normally purchases fresh produce from Also Veggies. They have signed a contract of sale that effectively lays out how sales and payments take place between them. So all their business transactions with each other will be based on the Contract (or Bill) of Sale.
LIFO, or “Last In First Out“, is a method of inventory control where stock that was purchased last is sold before stock that was purchased before. To put it another way, products that were last placed in the store are sold or used before older produced or acquired goods or materials. This kind of stock rotation ensures that fresh stock is always available for sale. In most cases, previously acquired goods would have already been on the shelves awaiting sale.
For example, a store owner purchases some goods on the ninth of January and then makes another purchase on the eighth of February. The goods that were purchased during February would be put out for sale in front of the goods that were purchased in January. Hence, the Last goods that came In are the First goods to go Out.
FIFO, or “First In First Out“, is a method of inventory control where stock that was purchased first is sold before stock that was purchased after. To put it another way, products that were first placed in the store are sold or used before more recently produced or acquired goods or materials. This ensures that stock does not spoil or expire before they are sold.
For example, a shop keeper buys some goods on the first of April. He then makes another purchase on the tenth of the same month. The goods that were purchased on the first of the month would be put out for sale ahead of the goods that were purchased on the tenth. Hence, the First goods that came In are the First goods to go Out.
