What is Goods? Meaning, Features, and More.

हिन्दी में पढ़ें:

There is some purpose behind the formation of any organization and to fulfill that purpose, transactions are done in the organization for which a product is required, and the product mainly consists of two elements, one of which is a goods and the other is service. The goods can be seen and touched but service is the opposite of it, it can neither be seen nor touched but can be understood as a result.

If a business deals in goods, it is very important that the business has goods, for this, the business buys goods from others and when a business buys goods, it becomes stock for it. As the business buys goods, the stock increases, and as it sells goods, the stock decreases. Note that stock can also decrease due to many other reasons.

What is Goods?

A goods is an economic thing that is traded in a business and can be seen and touched and it includes raw materials, finished goods, semi-finished goods, etc. In other words, the things (other than services) that a business buys for the purpose of selling are called goods. Goods come into a business through purchases and go out through sales and the goods lying in the business are called stock which is shown as closing stock on the credit side of the trading account and is also shown under current assets on the asset side of the balance sheet.

The definition of goods may be different for each type of business because the definition of goods depends on the nature of the business. For example, for a person who runs a furniture business, furniture will be goods, while for some other business, it will be an asset. Similarly, for a person who runs a machinery business, machinery will be goods, while for some other business, it will be an asset. Note that if a thing is used for the work of business, then it will not be called a goods.

Features of the Goods

Following are the features of the goods:

1. Economic Thing:

A goods is an economic thing because it has monetary value for example machinery, furniture, books, clothes, etc. and it is traded according to the nature of business. Note: The definition of a good may be different for different types of business.

2. Trade:

Goods is traded in a business because the business is formed primarily to trade in two things, one is goods and the other is services. For example, a machinery dealer deals in machines, a service provider deals in services, etc. Note: Anything (except services) is considered a goods for any business only if it buys it with the intention of selling it.

3. Tangible:

Goods are tangible in nature as they can be seen and touched for example machinery, cars, furniture, cloth, etc. and services are on the contrary which cannot be seen and touched and can only be understood through results. Note: Not all things are goods for all businesses.

4. Ownership:

Goods are owned (have ownership) because they have monetary value and governing bodies also assign ownership over them, and when goods are bought and sold, ownership is transferred from one person who currently owns the goods to another.

5. Recorded on the Books:

Goods is recorded on the books of the business like trading account, balance sheet, etc. but it is not directly recorded as goods, it is recorded as purchase, sale, stock, etc. For example, when the purchase is made it is recorded on the purchases account, trading account, etc. and when the sale is made it is recorded on the sales account, trading account, etc. and when the goods are lying in the business it is recorded as stock and is shown on the trading account and balance sheet.

Read Also:

• What is Debit? Meaning, Features, and More.
• What is Credit? Meaning, Features, and More.
• What is Payable? Meaning, Features, and More.
• What is Receivable? Meaning, Features, and More.

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