tnagaganesh
Apr 26, 2011, 04:23 AM
We have purchased material from abroad and the material is in transit as on closing of the financial year (say 31-03-11) but material physically received on 15-04-11. How to show this in books.
pready
Apr 27, 2011, 06:07 AM
When did the title of the material pass? Was it shipped FOB Destination or Shipping Point.
If the material was shipped FOB Destination, then there will not be a journal entry until you receive the material.
If It was shipped FOB Shipping Point, then you would include it in your inventory. Your journal entry will be:
Debit your material account for the amount
Credit your purchases or payable account for the amount