28 April 2021 sir that is different thing.,consider cost price is low, so does that cost price includes cost attributed to acquire that goods.....i.e. if I goods cost 1lakh and carriage inwards is 1000 rupees.. so what will be the cost of goods

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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28 April 2021 sir whenever we talk about cost of goods do we include all cost attributed to acquire it

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 April 2021 Cost includes carriage it will be 101000.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 April 2021 Yes, all cost related to acquisition to be included.

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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28 April 2021 so sir all cost attritubuted will be included in cost only in inventory or it can be with purchase....i.ei. purchased 1 tv worth 1lakh and paid transportation 1000 .can we pass entry purchase a/c 1,01,000 to cash a/c 1,01,000

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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28 April 2021 WHAT I MEAN TO SAY IS THAT ALL COST ATTRIBUTED TO PURCHASE WILL BE INCLUDED IN COST ONLY WHEN VALUING INVENTORY AND NOT WHEN PURCHASE OF GOODS IS DONE

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 April 2021 Yes, that is the way.

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SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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28 April 2021 WHICH WAY U ARE TALKING ABOUT???

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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28 April 2021 SO SIR, PURACHASE--10UNITS OF TV @ 1LAKH
CARRIAGE INWARDS--10,000
LOADING AND UNLAODING-2000
SALES--9 UNITS OF TV
WHAT WILL BE VALUE OF CLOSING STOCK IN THIS CASE???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 April 2021 One unit 11,200................

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SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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28 April 2021 So sir cost attributed to purchase of goods is added to the cost of goods only in case of inventory and not normal purchase...sir am I right or wrogn6

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 April 2021 iT'S ALWAYS ADDED................................

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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28 April 2021 When we purchase goods , cost attributed to acquisition of goods is also debited to purchase account..this is what you mean to say

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 April 2021 You can account transport handling charges separately in the books of accounts. For cost calculation consider all costs involved.
For assets capitalised include all costs for capitalisation.

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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29 April 2021 OK SIR SO FOR CALUCULATION OF COST OF GOODS SOLD COST ACQUIRED TO PURCHASE IS ALSO ADDED i.e FIRECT EXPENSES

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 April 2021 Yes you are right........

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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29 April 2021 SO SIR WHEN WE TALK ABOUT SALE OF GOODS ON SALE OR RETURN BASIS,, WHEN THERE IS NO CONFIRMATION BY CUSTOMER AT THE END OF THE YEAR WHETHER TO ACCPET OR REJECT,,, WE PASS ENTRY AS STOCK WITH CUSTOMER TO TRADING A/C.... HERE IT IS RECORDED AT COST... SO DOES THIS COST INCLUDES COST INCURRED TO ACQUIRE IT

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 April 2021 THIS COST INCLUDES COST INCURRED TO ACQUIRE IT

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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29 April 2021 Is it same in case of drawing I mean to say does cost includes cost incurred to acquire it

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 April 2021 Yes,.................

.....

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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29 April 2021 Sir in case of abnormal loss like loss of goods due to fire,theft does cost includes cost incured to acquire it

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 April 2021 Yes...........
.......

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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29 April 2021 So in sense we can say that whenever ther is purchase of goods in order to find cost of goods sold,cost of goods taken otherwise than sales, or any abnormal loss ...cost includes price paid for the product and price paid to acquire it

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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30 April 2021 Yes you are right,............

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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30 April 2021 Thank you so much sir for helping out...j hope u be safe in times of difficult situations

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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01 May 2021 sir why do we include cost incurred to transfer goods to consignee... as it is expense for selling the goods

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 May 2021 These expenses incurred post sale. Hence it's charged to consignee.
Selling price fixed by us is for sale across the counter.

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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02 May 2021 sir we debit goods sent on consignment account in consignment a/c which is then credited to trading a/c.. so we record amount in goods sent on consignment account at cost.. so does this cost includes cost incurred to bring the goods to us.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 May 2021 Yes.......................

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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03 May 2021 so sir for eg i purchased goods worth 1,00,000 on which 10,000 was spend on transportation . so when this goods are sent on consignment , so with what value it is recorded in consignemnt a/c on debit sie under "goods sent on consignement a/c"

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 May 2021 It's 1,10,000..............

SHIVAM JHUNJHUNWALA

SHIVAM JHUNJHUNWALA (Querist)
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29 May 2021 sir as you said when we withdraw goods from business we record it at cost and cost includes expense attributable to acquire that good.. so for eg. purchased 10 tv for 1000 each and spent wages on it 1000. withdrew 2 tv set for home. so drawings will be 2200 as you said.. but if we record this withdrawal of goods during accounting period, we debit drawings and credit purchase.. so purchase include only purchase price i.e. 2000 for 2 tv sets and doesn't include cost attributable to acquire to it. so when entry is passed during accounting period it will be drawings ac debit 2000 to purchase a credit 2000. so now expense attributable to acquire it which should now after drawings be attributable to owner will now be expense for business..and is completely opposite to what you said above.. and defeats business entity concept .this can happen for goods lost by fire whose accounting treatment is done during accounting period..plz explain???it is urgent and humble request to you to reply soon!!! thank you