When to pass journal entry for purchase ??

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hello everyone,

our client a pvt ltd company engaged in manufacturing of jewellery business.

following is the detail of goods purchased

date of purchase order 12/12/10

Date of receiving goods 31/03/2010

date of invoice 15/04/2010

Date of receipt of invoice 25/04/2010

My question when should the company pass the entry for purchases. currently the company is passing entry on the date of receipt of invoice from the supplier.

Waiting urgently for ur reply.

 

 

Replies (12)

date of invoice should be considered as date of purchase.

in my view.......... the company is authorised to follow any of the above ways:-

but the procedure once followed should be continued, otherwise it violates principle of comparability.......

Date of purchase order shoud not be taken as relevant date.

As per AS 9 revenue recognition and as per accrual concept, u can take relevant date as when it is established that liability in respect of purchases is accrued on you.

Preferably Date of receiving goods can be taken as on that date entry in stock register is made,thereby establishing the acceptment of liability by receiveing of goods.

The invoice date may also be taken as it is only consequential to receiving the goods.

Hi dude,

 

In my opinion, company can pass an entry on date of receipt of invoice. I.e. on 25.04.2010 company shall pass a entry for purchase however, date of an entry ( I guess, they must be using Tally ) shall be 15.04.2010 which is date of invoice.

 

As the gap between date of invoice and receipt date is only 10 days, at the year end it will not be a problematic to reconcile it.

In this case liability of the company occurs on the date when it receives goods not on the date of receipt of invoice. Entry should be made on the date of receipt of goods not on the date of receiving of invoice.

I totally agree with Mr. Sumit

a liability should be recorganised in its books by enterprise on date when it is certain that it will result in outflow of enterprise resources.

so entry for purchases should be made on date of receipt of goods

however in some cases it might happen that goods are delivered but suppliers name is not known

then we will pass entry

Purchases A/c Dr

To Suspence account

suspence account balance will be tallied against purchase orders placed and invoice of suppliers received

and when final bill is received like in above case on 25th we will pass a rectification entry

suspence account Dr

To Creditor account

but  for purchases remaining untallied on 31st march above entry will be passed on 31st march itself as suspence account cannot be shown in B/s                            

Entry should be made on 25th April, 2010. Corrrectly suggested by all.

If the goods are Excisable goods and if you are claiming CENVAT CREDIT for the above,then the date of RECEIVING the goods into your factory should be the relevant purchase date.

( As per Central excise Act, CENVAT is allowable on the date of RECEIPT of the inputs).

If not,your EXCISE RECORDS and ACCOUNTING RECORDS will not tally ( which can be dealt with by preparing a Reconciliation Statement , but is undesirable,to say the least).


In any case,the date of RECEIPT of the goods should be taken to be the date of Purchase.


date of invoice should be consider for accounting purpose and in stock register u can include on goods recieving date...........

because without invoice u cant  astertained amount hance cant make entry in ur a/c ing records , so it is advisable tht date of invoice will be date for accounts

NOTE: if ur r saying tht invoice recieved latter but dated of goods rec. date then ignore my reply, bcoz in tht both dates r same hence in tht case no confusion ........

hope u will clear


i am agree with sumit & Abhishekh . When seller book sales in his books then and then only we have to book purchase in our books.And as per as -9 when possession of goods is transfered and unflow of income is certain then we can recognize revenue, so seller recognize revenue at time of confirmation of goos received from purchaser is obtained. so purchaser has to book it as purchase when he given confirmation of receipt of goods without any reservation. so date of receipt of  goods should be treated as date of purchase and entry for purchase should pass on that date.  

Date of GRN is the date of purchase.

as per iam concerned wen we recived goods on that date pass purhase entry


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