Free of cost

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madhup (Querist)
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12 January 2014 issue of spares , accessories items on free of cost , how to pass the accounting entries & some of parts issues under warranty & manufacturer wil reiumburse value of warranty parts. pls explain accounting procedure for parts issued under warranty & free of cost.

@VaibhavJ

@VaibhavJ (Expert)
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12 January 2014 Hi,

Entry would be:

Warranty Receivable A/c Dr..
.. To Spares A/c..

Here you are creating receivable agst spares given on free of cost.

Warranty Receivable A/c will to be grouped under other receivable / current Assets, & Spares A/c is your inventory a/c

Thnaks