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