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PACKAGES AND CONTAINERS

PACKAGES AND CONTAINERS. Introduction.

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PACKAGES AND CONTAINERS

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  1. PACKAGES AND CONTAINERS

  2. Introduction • Container or package is anything in which product is packed for sale. It may be a packet, bottle tube drum cylinder jar or any other item. Packet or container may be of two type , viz.. primary or secondary. The former related to those packages which forms type of products. The cost of such containers is included in the cost of the product. The other type related to those containers which are required for distribution of goods to the customers. Such types of containers are usually Returnable to the seller within a stipulated period of time by the buyer.

  3. Accounting treatment … to exercise control on movements of containers to ensure that containers are properly returned by customers and due credit is given to them are charged separately. • B…. To see that there is no misappropriation of containers. • C…. To find out profit or loss on containers separately from the main product when a separate charge is made for containers. The accounting treatments of containers will be depend upon the policy of the individual concern. • Accounting for packages or containers is done to achieve the following objectives

  4. Containers non-returnable

  5. When a separate charge is not made 1 When a separate charge is not made The charge for the containers in this case will be included in the sale price of the goods. A containers stock account should be kept which will be debited with opening stock of containers and purchases and credited with closing stock, the balance being the expenses of containers during the period of the accounts is written off as distribution expense to the profit and loss account

  6. CONTAINERS STOCK ACCOUNT (when containers are not returnable and no separate charge is made)

  7. CONTAINERS STOCK ACCOUNT (when containers are not returnable and no separate charge is made)

  8. Prepare containers stock accounts from information opening stock – 20000purchases – 190000sale of containers scrapped -5000cost of container lost due to fire -6000containers in hard - 25000

  9. Prepare containers stock accounts from information opening stock – 20000purchases – 190000sale of containers scrapped -5000cost of container lost due to fire -6000containers in hard - 25000

  10. When separate charge is made • When separate charge is made – • The charge for the containers in this case will be included in the sale price of the goods. A containers stock account should be kept which will be debited with opening stock of containers and purchases and credited with closing stock, the balance being the expenses of containers during the period of the accounts is written off as distribution expense to the profit and loss account

  11. CONTAINERS STOCK ACCOUNT (when containers are not returnable and separate charge is made)

  12. CONTAINERS STOCK ACCOUNT (when containers are not returnable and separate charge is made)

  13. QUESTION -Prepare containers stock accounts from information opening stock – 55000purchases – 320000sale of containers scrapped -12000cost of container lost due to fire -10000containers in hard – 60000charged on customer -315000

  14. Prepare containers stock accounts from information opening stock – 55000purchases – 320000sale of containers scrapped -12000cost of container lost due to fire -10000containers in hard – 60000charged on customer -315000

  15. Containers returnable

  16. When a separate charge is not made • The double entry book keeping will be similar to that • Except that opening and closing stock will be divided between containers in the warehouse and those in the hand of the customers stock must be brought into the accounts in cost less adequate depreciation

  17. Following journal entries are passed

  18. When a separate charge is made • Container or package is anything in which product is packed for sale. It may be a packet, bottle tube drum cylinder jar or any other item. Packet or container may be of two type , viz.. primary or secondary. The former related to those packages which forms type of products. The cost of such containers is included in the cost of the product. The other type related to those containers which are required for distribution of goods to the customers. Such types of containers are usually Returnable to the seller within a stipulated period of time by the buyer.

  19. Following journal entries are passed

  20. THANK YOU

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