what will be treatment of freight paid on purchase ?
2 Replies
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 03 April 2021
If it is capital purchase, it will be capitalised initially. When you again purchase machinery, charges will be capitalised. there is no subsequent treatment for it.
If it is inventory, freight charges will be included in the cost of finished inventory.
If it is office supplies, it will be expensed.
Sonu Kumar
(Account Manager)
(665 Points)
Replied 04 April 2021
Freight Charges of Fixed Assets Will be Capitalized
Freight for Construction Material and Store Consumable Will be Booked Under Direct Expenses " Transportation Charges"
Fright Charges for Office Material Booked Under Indirect Expenses "Packaging and Forwarding Charges"
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