I agree with what Aman & keyal have opined.
The accounting treatment depends on the terms between the supplier and the buyer. Purchase has to be recognised when effective control/possession, rights & obligations gets transferred to the buyer.
Very practical problem please answer....
Page no : 2
CA PAVAN KUMAR
(chartered accountant)
(68 Points)
Replied 10 September 2011
hi friends,
i am working in a trading company which imports goods from china,
friends pls clarify me in the following regard,
the company policy is to record the purchases at the time of the Raising of GRN. On 31st March the company paid duty and for some clearence issues goods were still in the bonded ware house.
In this case GRN was raised only after the goods received to the godown, but all the risks and rewards are transferred to the buyer at the year end.
in this situation when company has to book the purchases when has to book the goods in transit at the time of closure of the books.
Let me know your views in this regard.
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