Freight

Shivani (Learner) (1881 Points)

15 December 2015

Dear Friends

If X sells goods to Y and issue following invoice

Sale 10000

VAT 5% 500

Freight 2000

Total 12500

X has to pay freight of Rs. 2000 to Transporter Z for sending goods to Y.

X is recovering the freight amount from Y in Sale invoice.

what will be entries in books of X relating to Y and Z.

regards

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4 Replies

CA and CMA Ravinder Singh (CA and CMA) (853 Points)
Replied 16 December 2015

Y A/c Dr. To Sale A/c To Output Vat a/c To Freight A/c Freight a/c Dr. To Z Transporter a/c

CA and CMA Ravinder Singh (CA and CMA) (853 Points)
Replied 16 December 2015

1) Y A/c Dr. To Sale A/c To Output Vat a/c To Freight A/c ....... 2) Freight a/c Dr. To Z Transporter a/c

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Shivani (Learner) (1881 Points)
Replied 17 December 2015

Dear Ravinder Sir

Sat Sri Akal

If i go by your entries then balance of Freight Account in books of X will be ZERO.

Should it be ZERO because X is recovering the Freight from Y?

Regards

ish kumar sharma (Sr. Manager Accounts & Finance) (301 Points)
Replied 17 December 2015

Yes it should be Zero coz you are just transfereing the amount from one hand to another, nothing left with you.

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