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Inventory shifting

Pankaj Arora (Learner) (3134 Points)

21 March 2013

Dear All

our company is going to change their godown. i want to know expenses borne from shifting of inventory from one godown to another godown or office from where inventory would be sales.

pls let me know under which head we have to book this expenses.

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DEEPU HN (Student CA Final ) (80 Points)
Replied 21 March 2013

Dear sir ,

Amount incurred for,

Transporation of material from one place to another palce for production activity that will be treated as Transporation Charges under Trading account.

Transporation of Goods or inventory from one place to another palce for selling activity that will be treated as Travelling or Transporation Expenses Under Profit and Loss Account.