27 August 2008
Suppose we sold material worth rs 100 to a customer
During transit there is a loss of 5 Rs material and customer received material only worth 95/- .Now as per the contract with the transporter ,this loss to be recovered from the transporter
Now there are two ways to account it
1) First approach
Transporter Dr 5 & Customer Cr 5
2)Second Approach
Sale Dr 5 RS & Customer Cr 5 Rs
Then
Transporter Dr 5 & Misc Income Cr 5
plz let me know which one approach is correct and why ??
27 August 2008
The two entries while routed through sales account will be self explanatory otherwise entry effecting customer's account as well asTransporter,s account may have to be explained.
27 August 2008
It should not be treated as a miscellaneous income as the ggods are lost in the year itself and recovery from transporter or insurance co should be adjusted in the trading account itself whether as a sale or otherwise.
CAclubindia
