Loss by transporter

This query is : Resolved

M.Arshad (Querist)
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26 August 2008 suppose we sold material of Rs 1000 to a customer .
on the way there is a theft of material amountin to rs 100 and as per the contract ,transporter has to bear the loss

Now there are two ways

first
Debit the transporter 100 RS
&
Credit the customer 100 RS

second

sale Dr 100 Rs
Customer Cr 100 Rs
and then
transporter Dr 100 Rs
Misc Income Cr 100 RS

Which one approach is correct and why ???

CA Shailesh +91 9393926464

CA Shailesh +91 9393926464 (Expert)
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27 August 2008 Since, the income is recognised as and when the goods are despatched and the contractor is liable to pay for any loss-in-transit, ur first entry is the better one