What should be entry

A/c entries 1741 views 11 replies

During the audit of a rice's purchaser and seller i found that the is a large amount of normal loss due to some reasons but our client does not considered it for inventory valuation purpose in tally which results in inflating their closing stock.

So please suggest m that what should be the entry to nullify the impact of normal loss in closing stock.

For e.g I purchased 100qtl rice from party @ 45/qtl but actually i received only 99qtl. 1 Qtl may be treated as normal loss and we are also showing 100qtl in Closing stock.

 

Thanx in advance

Replies (11)

r u speaking about  normal loss or loss in transit?

your example varies

Entry is as follows:

Closing Stock A/c      4455   

Normal Loss A/c            45

       To Trading A/c                      4500

 

P&L A/c                               45

       To Normal loss A/c                    45

This is based on the assumption that loss in transit constitutes normal loss.

Originally posted by :Shrikaanth V B
"

Entry is as follows:
Closing Stock A/c      4455   
Normal Loss A/c            45
       To Trading A/c                      4500
 
P&L A/c                               45
       To Normal loss A/c                    45
This is based on the assumption that loss in transit constitutes normal loss.

Since entry is to be passed in tally then in which group i show to trading  a/c.

Thanx

"


 

R u asking under which group u should show the "normal loss" in Tally?

Originally posted by :Ruchika Gupta
"

R u asking under which group u should show the "normal loss" in Tally?

Yes but trading a/c

Thanx

"


 

normal loss a/c Dr.   45

         To Stock a/c              45

P&La/c Dr.                 45

         To Normal loss a/c     45

hey dear friends..

i want to know dat how entry will be passed in tally  for..

Ques:- received petrol 500 ltrs worth RS 5000 on 1.1.2012. but after one month 50 lts gets evaporated.

but main branch is giving claim for 50 ltrs.. how sale entry will b passed nd how claim entry will be passed

plz let me know how it will be passed in tally..

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Dear Nilesh  

As per AS-2 or IND AS 2 

If the portion of petrol which gets evaporated is in normal nature then you must inflate the price of the stock because normal loss are the loss which is normal in  nature of the business & loss arising due to such loss is to be borne by the customer hence you should inflate the rate in tally

 

   New price  = 5000/500-50 = 11.11 (this will become a new price)

& as u have seen the post about the treatment of normal loss , almost everyone has recommended to charge it to P/L A/c however in reality normal loss is to be borne by customer hence it cannot be charged into P/L a/c however Abnormal loss are the losses which is basically happens because of the fault of Manufacturers so these are the cost are to be borne by Manfacturer itself hence it can be transferred into P/L A/c

                  

hello,

         I have received the bill of Factory Canteen Caterors of Rs. 50000. After deducting TDS of 1% u/s194C the balance amount is Rs. 49500. Out of this Rs.3000 is not going to be bear by the company and this Rs. 3000 shall be paid by off-role employees to the caterors directly.Company has issued cheque of Rs. 46500 to the caterors.So now my question is whether i shall book expense by Rs. 50000 or by Rs.46500. What shall be the accounting entry?

 


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