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Categories >> Accounting >> Accounting AllOther
 
 


 

 
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Question
what is goods in transit and how to pass an entry


 Question Submitted By :: Accounting-AllOther
I also faced this Question!!     Answer Posted By  
 
Answer
# 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 ?    93 Yes 17 No
Hariram
 
Answer
# 2
First Entry

Goods in Transit DR
Creditors CR

Purchase A/c DR
Goods in Transit CR
 
Is This Answer Correct ?    27 Yes 7 No
Mozabir
 
 
 
Answer
# 3
Goods in transit a/c dr
To stock a/c
 
Is This Answer Correct ?    14 Yes 10 No
Amol
 
Answer
# 4
goods in transit = asset 
Is This Answer Correct ?    4 Yes 0 No
Milan Kkg
 
Answer
# 5
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 ?    4 Yes 0 No
Manish
 
Answer
# 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 ?    3 Yes 1 No
K.v.
 
Answer
# 7
Goods in transit will arise in two circumstances

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

Ans:
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)

Ans:
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 ?    16 Yes 15 No
Sandheep
 
Answer
# 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
Mozabir
 
Answer
# 9
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
 
Answer
# 10
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
follows:
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 ?    1 Yes 2 No
Chris
 

 
 
 
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Actually we had Posted P.V.C bills to Indian Railway the total bills amount is Rs.10,00,000/-, and government had passed only Rs. 8,00,000/- and gov. had said that there are no more P.V.c bills are lying outstanding in their a/c, so for now are claiming Rs. 2,00,000/- as loss on sale, i m totally confused what would be the impact on the Profit and loss a/c , and in which group it will come,if I do a entry of:- dr. Central sale @12.5% a/c Rs.2,00,00/- Cr. Loss on sale a/c Rs.2,00,000/- or Will i adjust the Cst@12.5% on Pricipal Value, or will i pass on the entry on total amount i.e Rs.2,00,00/- Plz guide,me soon.   4
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