what is goods in transit and how to pass an entry


Answer Posted / cma ilyas

If purchase is already recorded, but goods are in transist, then the entry will be :

Goods in transit a/c Dr
To Purchase a/c

Goods in transit is shown as a current asset in the balance sheet

When goods are recieved, the entry will be reversed:

Purchase a/c Dr
To Goods in transit a/c

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