misc. expenses included in purchases

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 June 2011 hi...

nowadays i am doing audit of a publishing house, & while vouching the purchases i found various expenses under the head purchases
e.g book binding expenses, royalty payments etc.

is this right to book these expenses under the head Purchases.
my CA is ok with this.... but i am not.

Jitender

Jitender (Expert)
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04 June 2011 expenses directly related to purchases upto its procurement can be booked under the purchases.

Querist : Anonymous

Querist : Anonymous (Querist)

04 June 2011 they are purchasing only papers to print the book & showing other direct expenses under purchases, like binding, royalty etc.

is this fair treatment ?

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CA Sumat Singhal

CA Sumat Singhal (Expert)
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06 June 2011 I think as u mentioned binding and royalty exp. Is not directly atributable to purchase , these are operational expense so required to be charged to profit not purchase....members opinion are invited..
Sumat Singhal