COD sales

From Wikicpa

C.O.D. sales (aka "Cash on Delivery") are common when the customers do not have an established credit history.

In an effort to make the sale and at the same time to eliminate the possibility of uncollectible accounts, a C.O.D. sale is arranged where the seller will deliver the goods contingent upon payment of the invoice.

For financial statement presentation, special problems arise when merchandise sold C.O.D. is in transit when the books are closed. In such case, the merchandise cost should be remain as inventory rather than a receivable, and the sale should be excluded from the income statement.