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Acconting entry for freight subsidy received

k bhaskar (manager) (34 Points)

19 June 2011

what should be accounting entries and treatment of freight subsidy received in cuurent f.y year fro freight of 2007?

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CA MAYANK WADHERA (CA CS CMA(I)) (789 Points)
Replied 19 June 2011

IF STOCK OF 2007 IS STILL NOT SOLD THEN REDUCE SUCH AMOUNT OF SUBSY FROM COST OF SUCH STOCK AND BALANCE AMOUNT WILL BE CREDITED TO P&L A/C AS INCOME

ENTRY WILL BE

FRIEGHT SUBSY A/C DR.

TO INVENTORY A/C

TO PROFIT & LOSS A/C ( BAL. AMOUNT)

IF STOCK OF 2007 IS SOLD THEN ALL AMOUNT OF SUBSY WILL BE CREDITED TO P&L A/C

ENTRY WILL BE

FRIEGHT SUBSY A/C DR.

TO PROFIT & LOSS A/C

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CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 19 June 2011

if the provision for subsidy was made in the year 2007

bank ac --- - - - - - - - - - -- dr.

freight subsidy receivable ac

if no provision was made

bank ac- - - - -- - - -- - dr.

to freight subsidy

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CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 19 June 2011

in my view this subsidy should be directly transffered to pand l ac. because this subsidy is received for freight on goods sold

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 19 June 2011

freight subsidy is given by government to enhance the export hence it should be directly t/f to p and l ac -- -

Tally Academy | sec 22 NOIDA (shwetajoshi@mashinfotech.com) (25 Points)
Replied 19 June 2011

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