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Imported purchases

1293 views 1 replies

Vks

28 Points Joined March 2007

Hello

Friends

One of my client has imported material and same is kept with warehousing bond and is removed from bond as and when required. When material is removed from bond it it booked under purchases and whatever material remains on 31st march in bond is shown as material in transit. Rent of warhousing bond is born by my client. Is this proper accounting or should entire purchases be booked under purchases.

kindly share yr expret vier.

Regards.

VKS

Replies (1)

Kaustuv

Practicing CA

1778 Points Joined March 2007

dear sir, I think the accounting treatment followed by your client is proper for the reason that title of warehoused goods can be relinquished before order for home consumption is made. in that case he has to pay only warehouse rent and he is relieved. so only after order for home consumption is made it is that he cannot relinquish the title to goods. so I think it is proper to book purchase only after goods are released from the warehouse. this is my view. please tell me whether I'm right on this point.. with regards Kaustuv