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    tnagaganesh's Avatar
    tnagaganesh Posts: 1, Reputation: 1
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    #1

    Apr 26, 2011, 04:23 AM
    How to account material in transit
    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's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    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
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