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Reply from VidhyaDhar on Sep 6 at 10:56 PM Hi Stefanos,
I do agree with your view. However, the OP, I think, had presented a slightly different scenario as compared to what you have narrated:
OP's scenario :
1. Advance payment to vendor (for 10 containers) 100 USD - It agrees with your scenario.
2. Partial Receipt of material from vendor ( 5 containers)
Stock Debit (5 containers) 50 USD and GR/IR Clearing Credit 50 USD (*)
(*) This is the entry where your scenario seems to differ from that of the OP's.
According to the OP, I assume, stock ( viz. 5 containers for 50 USD ) only appears to have been accounted in the Balance sheet and the other 50 USD would still remain as a debit balance in the vendor's account in the Balance sheet. Since the balance of stock has not been received ( viz. title of ownership has not been passed on to you as yet ), it is simpler to present the scenario as a vendor down payment, I feel.
If stock has been received partially and duly accounted ( for 5 containers valued at 50 USD ), I am afraid, there is no inflation of stock accounting and therefore probably does not require any correction at all. It is just that the vendor is still accountable for 50 USD and the amount still remains as a down payment.
You have shown in the second entry that the entire stock (viz.10 containers valued as 100 USD) as having been received (which is not how the OP has projected) by debiting stock and crediting GR/IR for 100 USD.
Further, please confirm if the closing stock value would be accounted as 50 USD through your suggestions of leaving entries 1) as it is or 2) making a transfer from GR/IR to Goods in transit. I am not too sure if closing stock balance would be reflected correctly.
Regards,
VidhyaDhar
| | | ---------------Original Message---------------
From: aye thanda
Sent: Thursday, September 22, 2011 11:54 PM
Subject: Advanced Payment and Goods in Transit
Now we have made advanced payments to supplier.
But the goods have not been received yet.
For advanced payment- DR Supplier A/C
Cr Bank A/C
For receivable goods, should I prepare Goods In Transit a/c?
If I need GIT A/C, how should I pass journal entry?
Please kindly reply to me. |
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