Acconting for shortage of goods

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 April 2011 Dear Expert
Good day and greeting
As we are manufacturer of corrugated boxes .
When we are sending goods to our customers some time they reporting shortage of goods , this may be either due to counting mistake or goods sold by drivers during transit .
My queries is that either we can show this as loss in transit or goods pilfered in transit as debtors are ,making payment after making adjustment for the same .
Is it is admissible expanses as per Income Tax Act .
Further sometime goods were rejected on ground of inferior quality how we accounting for that .
Your valuable advise on the above mentioned matter will be highly appreciated by me

Thanks

RANGA SRINIVAS

RANGA SRINIVAS (Expert)

25 April 2011 Dear

Lost during the transit and also loss on account of inferior quality is allowable expenditure

CA Ravi Sisodia

CA Ravi Sisodia (Expert)

25 April 2011 if loss arises in the normal course of business then allowed as expenses.

P/L a/c Dr.
to stock

Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2011 Dear Ravi
And how we should account for goods rejected due to inferior quality .
We are neither receiving goods nor getting payment for the same .

Your advice will be highly valued by me .

Thanks

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now