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Accounting of freight charges receivedd from customers


Ankit (C.A.-Student)     19 August 2015

Ankit
C.A.-Student 
 22 likes  675 points

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Dear All

A person is engaged in trading in goods where he is charging freight/courier charges for delivery of goods from customers in advance on notional basis. Amount received can be either excess or short as compared to actual freight charges which result in income or expense on individual bill wise. However there is possibility that at the end of financial year there will be expenses (Debit balance of Ledger)

 

My Query is

  1. In which Ledger account it ( Freight charges received ) should be accounted? And under which group?
  2. Actual freight charges incurred should be account as freight charges or sales outwards (EXPENSE), but the amount received can be adjusted with expense account ?
  3. Is there any AS or GAAP or guidelines stating the correct practice, please share.

Thanks in advance

avater

V P Narasimhan (Accounts Manager)     15 September 2015

V P Narasimhan
Accounts Manager 
 46 likes  762 points

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Dear

You can Credit ethe Expense and net the Ledger Balance. Other wise what has to be done either you have to open an a/c viz., Freight Recd under Misc Income and show seperately. Instead its better to square off in the Expense itself. The net result is the same.


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