Freight ouwards

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 April 2014 Can anybody tell me

IN PROFIT & LOSS A/C where will freight outwards will be come if we were receiving it from the party to whom we are selling goods.

and Whether freight inwards will be added to the cost of goods which we have purchased or it is separately shown in trading a/c.

CA Devanand Jethanandani

CA Devanand Jethanandani (Expert)
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17 April 2014
If we are paying freight outward and the same is reimbursed by the party, then it is not out expense, hence on making freight we will debit party's a/c. (not freight outward a/c.) and on reimbursement by party, party's a/c. will be credited.

Freight inward is to be separately shown in trading account.

Querist : Anonymous

Querist : Anonymous (Querist)

18 April 2014 Thank u sir

But can u tell me entry for this

plsssssssssss sir its a request

CA Devanand Jethanandani

CA Devanand Jethanandani (Expert)
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19 April 2014 Entries,

1.) On payment of freight outward on
behalf of party

Party A/c. Dr. XXX
To Cash / Bank Cr. XXX
(Narration : freight paid on behalf of party)

2.) On reimbursement of the same by party

Cash / Bank Dr. XXX
To Party XXX
(Narration : Freight reimbursed by party)

3.) On payment of freight inward

Freight inward (direct exp.)Dr. XXX
To Cash / Bank Cr. XXX

Regards,
Devanand

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