Exp on purchase

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528 Points Posted on 03 April 2021

what will be treatment of freight paid on purchase ?

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On 03 April 2021 at 18:08 Report
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The treatment of freight paid on purchases depends on the nature of the item bought. For capital purchases like machinery, freight costs are capitalised. If the purchase is for inventory, freight charges are included in the cost of finished goods. However, for office supplies, these costs are typically expensed.

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My grammar is 💯 good I
7306 Points Posted on 03 April 2021

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. 

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On 03 April 2021 at 21:57
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Account Manager
665 Points Posted on 04 April 2021

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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On 04 April 2021 at 11:14

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