Abhinav Garg
(33 Points)
Replied 12 January 2010
Hi Deepika,
I would attempt this in two ways:
1) Where the Purchase order has the freight amount built in - the company should recognise the purchase at its landed cost the rate being arrived from the purchase order, and inventory valuation being done at the weighted average rate
2) Where the PO does not have Freight amount built in, Purchase should be recognised at the PO rate eexclusive of any Freight cost and thereafter, a manual entry for freight would be required to upload the cost in the inventory GL
Hope this is of help
Regards
Abhinav Garg
CAclubindia
