Hi

I want to know Accounting treatment for following

Client business is Petro Chemicals. He has to deliver Petrol to Customer. When loading to Tank (Think it is 100lts Capacity). But when it is reached to Customer the capacity is 95 Lts.

What treatment shall i take in my books for 5Lts. Under what account head i have to take. What is the account head type. What is the treatment for Year end.

With Regards

Guhanadh

HI, I THINK ENTRY WILL BE:-

(1) CLINT'S A/C ..............DR.(100LTR)

                  TO SALES A/C(100LTR)

(2) LOSS IN TRANSIT A/C (OR,SALES A/C)................DR(5LTR)

                  TO CLINT'S A/C(5LTR)

 Hi Rupesh... Thanks for Reply

What is Clints A/c

The Loss is not due to Business Activities. It is due to Operational Activities. I can not Treat that 5Lts in Revenue because it will increase Revenue but no cash will be realised.

Suppose if i consider Loss in Transit, it is consider as trading loss. So shall i consider it as Tarading loss. Is it Correct Treatment What i said

hi, when u depatch materials out of our unit, u have to raise the invoice. As u mentioned, when the tank  reached to customer, it was only then found that the material is less than what delivered. so according to me, what u have to raise bill with full value and after the confirmation from the party a credit note should be given to the party.

Thanks & Regards

Vibhash Sah

i thought normal loss have no accounting entry

entry only if it is abnormal loss

there is always a fixed percent of normal loss on sale of goods... but if loss is higher than that limit it will be charged to P&L as an abnormal loss .. else there is no entry for normal loss.....

 Hi Sanyam

May i know what accounting head i have to crearte for both Normal Loss and Abnormal Loss. What is the treatment for year end.

Thanks

 Hi Sanyam

May i know what accounting head i have to crearte for both Normal Loss and Abnormal Loss. What is the treatment for year end.

Thanks

hey guys its normal loss.. trading account is dealing with the trading activities.. so wat are goods coming and wat are going that will be come under trading acount and loss due to likerage you are showing in the pl..

AFTER GIVING MY EARLIER ENTRY, GIVE THE EFFECT OF LOSS IN TRANSIT(NORMAL LOSS) IN THE VALUTION OF CLOSING STOCK,YOUR CLOSING STOCK WILL BE INCREASED BY NORMAL LOSS AT THE END OF YEAR.