Accounting Entry

GOODS IN TRANSIT A/c Dr.

                                 To PARTY A/c  

No Question of material purchases reflecting in accounts. It will come after 31st march since you received on 3rd April.

If you are certain with this transaction i.e, booked before 31st march. Can make provision for purchases

1. Goods In transit A/c                                  Dr

                              To Creditors a/c 

2. Purchases A/c                                                Dr  

                         To Goods in transit

if the risk and reward is transfered to you by 31st march then the entry mentioned by sumit grover shall be passed, else no entry shall be passed

mr.  Chiradeep,

when goods havnt received  till 31st march, den how can u book purchases in this year itself?

can u plz xplain d concept?

Agree..  with chiradeep and Kunal :)
 

On 31st March

Goods in Transit                 Dr

          To Party A/C

On 3rd April

Purchases                            Dr

           To Goods In Transit

Advance to crs      dr

      To Bank

Stock in transit      dr

      To Advance to crs

Agree with Kunal

take a break ...............

the rights of goods in transit belongs to buyer, as the invoice /TR is issued in his favor only, its the goods of buyer which is on way and he will receive it before 31-march or after that does not matter.

in case he has to issue form C or form F  or form H against such transit goods, carry forward to next year will make a mess only, to obtain such forms from department

book the purchase on 31 march,

for stock entries > make a godown named as "goods in transit" and debit the stock in that godown

on actual receipt, debit the natural stock you maintain and credit  "stock in transit ".

Because we are following double entry system of accounting for that we made entries under accrual basis so, we should recognise the purchases in the same year if the ownership of the goods transfered to trader and we make the following entry 

On 31st March

 GOODS IN TRANSIT A/c Dr.

                                 To PARTY A/c

On 03 April

Purchases A/C Dr

              To Goods in transit A/C

AS PER AS 9  "RECOGNITION OF INCOME"   NO ENTRY SHOULD BE PASSED UNLESS RISK AND REWARD IS TRANSFERRED TO THE OPPOSITE PARTY.