The party has supplied the materials on 30th March but we have received the material on 3rd April in what way party and material will be reflected in the accounts as on 31st March ?
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Accounting Entry
Replies (14)
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?
k j said it. . it is the que that whtr risk and reward transferd or nt.ie; all the right of the propert.and he takes all the risk in it. ,
| Originally posted by : Chiradeep.R.H | ||
 |
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 |
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GOODS IN TRANSIT A/c Dr.
To PARTY A/c
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.
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