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Accounting Entry

Ashok (Accountant) (44 Points)

13 July 2011

The party has supplied the materials on 30th March but we have received the material on 3rd April in what way party and material will be reflected in the accounts as on 31st March ?

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14 Replies

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 13 July 2011

GOODS IN TRANSIT A/c Dr.

To PARTY A/c

1 Like

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Chiradeep.R.H (Chirahi & Associates - Consultants) (240 Points)
Replied 13 July 2011

No Question of material purchases reflecting in accounts. It will come after 31st march since you received on 3rd April.

If you are certain with this transaction i.e, booked before 31st march. Can make provision for purchases

1. Goods In transit A/c Dr

To Creditors a/c

2. Purchases A/c Dr

To Goods in transit

Kunal Jain (Associate) (26 Points)
Replied 13 July 2011

if the risk and reward is transfered to you by 31st march then the entry mentioned by sumit grover shall be passed, else no entry shall be passed

Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 13 July 2011

mr. Chiradeep,

when goods havnt received till 31st march, den how can u book purchases in this year itself?

can u plz xplain d concept?

manu4camanu (student) (22 Points)
Replied 13 July 2011

k j said it. . it is the que that whtr risk and reward transferd or nt.ie; all the right of the propert.and he takes all the risk in it. ,

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@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 13 July 2011

Originally posted by : Chiradeep.R.H
	No Question of material purchases reflecting in accounts. It will come after 31st march since you received on 3rd April. If you are certain with this transaction i.e, booked before 31st march. Can make provision for purchases 1. Goods In transit A/c Dr To Creditors a/c 2. Purchases A/c Dr To Goods in transit

Anshul Shukla (Article assistant) (63 Points)
Replied 14 July 2011

GOODS IN TRANSIT A/c Dr.

To PARTY A/c

1 Like

Aparna Raja K.C (Student) (520 Points)
Replied 14 July 2011

Agree.. with chiradeep and Kunal :)

CA Adesh Gupta (Finance Manager) (160 Points)
Replied 14 July 2011

On 31st March

Goods in Transit Dr

To Party A/C

On 3rd April

Purchases Dr

To Goods In Transit

CA Aditya Modi (Associate Manager) (159 Points)
Replied 14 July 2011

Advance to crs dr

To Bank

Stock in transit dr

To Advance to crs

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radha (ggk) (44 Points)
Replied 14 July 2011

Agree with Kunal

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 14 July 2011

take a break ...............

the rights of goods in transit belongs to buyer, as the invoice /TR is issued in his favor only, its the goods of buyer which is on way and he will receive it before 31-march or after that does not matter.

in case he has to issue form C or form F or form H against such transit goods, carry forward to next year will make a mess only, to obtain such forms from department

book the purchase on 31 march,

for stock entries > make a godown named as "goods in transit" and debit the stock in that godown

on actual receipt, debit the natural stock you maintain and credit "stock in transit ".

p v s sudhir kumar (0) (48 Points)
Replied 14 July 2011

Because we are following double entry system of accounting for that we made entries under accrual basis so, we should recognise the purchases in the same year if the ownership of the goods transfered to trader and we make the following entry

On 31st March

GOODS IN TRANSIT A/c Dr.

To PARTY A/c

On 03 April

Purchases A/C Dr

To Goods in transit A/C