what will be treatment of freight paid on purchase ?
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Exp on purchase
Replies (2)
If it is capital purchase, it will be capitalised initially. When you again purchase machinery, charges will be capitalised. there is no subsequent treatment for it.
If it is inventory, freight charges will be included in the cost of finished inventory.
If it is office supplies, it will be expensed.
Freight Charges of Fixed Assets Will be Capitalized
Freight for Construction Material and Store Consumable Will be Booked Under Direct Expenses " Transportation Charges"
Fright Charges for Office Material Booked Under Indirect Expenses "Packaging and Forwarding Charges"
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