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Categories >> Accounting >> Accounting AllOther


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what is goods in transit and how to pass an entry

 Question Submitted By :: Accounting-AllOther
I also faced this Question!!     Answer Posted By  
# 1
As per the revenue recognition - If the terms is FOB, then
this entry is to be passed. ie. only at the time of Risk
and rewards are transferred to the buyer.
Goods in transit entry is as follows

Goods in transit (Shown under Inventory schedule) A/c Dr
To Party (The liability is not understated)

At the time of receipt of goods
Inventory RM A/c Dr
To Goods in trasit

Net effect is Inventory RM A/c to Party A/c

at the time of consumption the entry is passed as
RM consumption A/c Dr
To Inventory RM.
Is This Answer Correct ?    94 Yes 18 No
# 2
First Entry

Goods in Transit DR
Creditors CR

Purchase A/c DR
Goods in Transit CR
Is This Answer Correct ?    30 Yes 9 No
# 3
Goods-in-Trasit means Material has been despatched by
Supplier but not received by us this entry is important when
book to be closed on 31st, March

A when Goods in Transit (Matching Concept)

Goods-in -Transit A/c --------Dr. (Current Assets)
To Party A/c --------- Cr. (Sundry Creditor)

B) When Goods Received

Purchased A/c__________Dr.
To Goods-in-Transit A/c--------- Cr.
Is This Answer Correct ?    9 Yes 0 No
# 4
Goods in transit a/c dr
To stock a/c
Is This Answer Correct ?    15 Yes 10 No
# 5
goods in transit = asset 
Is This Answer Correct ?    5 Yes 0 No
Milan Kkg
# 6
Goods in Transit Dr (Current Assets)
Party account Cr (Current Liabilities under creditors group)

After receipt of materials at destination place:

Stores stocks Dr
Goods in transit Cr
Is This Answer Correct ?    4 Yes 2 No
# 7
Goods in transit will arise in two circumstances

1. Purchase :(Bills received and paid but not goods(L/C))

a. Dr.Purchase & Cr. to Bank (pymt made by bank)
b. Dr.Goods in transit (BS) Cr. P/L.
(entry on closing date)
c. Dr. Inventory Cr. to Goods in Transit.(when
goods received)

2. Sales:(Goods on transit not received by buyer)

a. Dr. Goods in transit cr. to Trading A/c
(adjustment entry on closing date (CA Dr P/L Cr)
b. Dr. Customer Cr. Goods in Transit.(when
goods received by customer)

forgive me if im wrong..
Is This Answer Correct ?    17 Yes 16 No
# 8
Goods in transit A/c -------Dr
To, Creditors A/c

Purchase A/c ---------------Dr
To, Goods in transit A/c
Is This Answer Correct ?    2 Yes 1 No
# 9
From Seller's books when inventory leaves the warehouse:

Debit Goods-In-Transit (Balance Sheet)
Credit FG Inventory (Balance Sheet)

When customer acknowledges receipt (Delivery Order signed
and dated), record transaction on customer receipt date as
Debit Account Receivable (Balance Sheet)
Credit Sales (Income Statement)

Debit Cost of Goods Sold (Income Statement)
Credit Goods In Transiot Account (Balance Sheet)
Is This Answer Correct ?    2 Yes 2 No
# 10
when u purchased goods from creaditor. the entry will be...

Purchase a\c dr.
to creditor a\c

And when goods purchased but not received by buyer yet than
entry will be...

Good Purchased a\c dr.
to good in transit a\c.
Is This Answer Correct ?    2 Yes 2 No
Sumit Kumar

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