Journal entries

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2014 our company purchased certain bearings classified under stores & insurance spares (Current Assets)from a party for Rs.100000/-. There was a clause in the purchase order that if the materials were not delivered to us within a stipulated time we are going to deduct certain amount from the bill.As a matter of fact we deducted Rs.3000/-. my question is whether the stores A/c will be dr by Rs.100000/- or Rs.97000/-.plz provide with the J.entries

Kumar

Kumar (Expert)
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02 August 2014 Revenue is accounted is net of Late delivery charges (aka Liquidated damages) as per AS 9. Accordingly cost shall also be accounted net of LD for Rs. 97000

Dr Stores and Spares
Cr Vendor