04 August 2012
As per the principles of Indian GAAP, once the goods are received, it becomes the property of the buyer. Receipt of the invoice from the seller is only a formality. Hence as per the conservative accrual concept, we can credit the seller and debit purchase account, if the actual price is known. But in my view you cannot account for any input credit (for VAT and Central excise) as invoices are mandatory for claiming that. If the exact price is not known, you should make a provision for expenses by creating equal liability and expense.
Also, the cost of such goods received must be taken for valuation of closing stock.
The entries could be: if exact price is known: Purchase Dr. To, Creditor for purchase
and include the same amount in closing stock also.
If exact price is not known: Purchases Dr. To, Provision for expenses
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