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Accounting period of purchase invoice

A/c entries 652 views 2 replies

swohra

none

537 Points Joined September 2007

Dear members,

One client purchased goods on order & received purchased invoices dated 25.03.2012 (march month) in the month of April & May and goods also received in the month of april & may. There is no risk of goods in transit because seller charges insurance in the invoice. Now should it be account for in the month of March or April & May? Please tell the basis of accounting for the above transaction.

Thanks in advance

Replies (2)

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

As the invoice date is relating to the month of March, so the entity is liable to accrue for the expense in the month of MArch itself following the principle of Accrual Accounting. So the goods though received in Apr shud be accounted for in the month of March & will be included in the inventory.