Accounting Dictionary - Accounting Definitions
Instalment Method
Instalment Method is a method to recognise revenue where every cash payment from the instalment sales is considered to include partial payment of inventory cost and gross profit, i.e. when scheduled payment is received it is recognised as revenue and at the same time certain percentage of inventory cost is included into the Cost of Goods Sold. This percentage is usually based on the share of the scheduled payment in the total value of the sale.
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