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What is the journal entry to record the purchase of Packaging Materials?

we selling orders, and deliver them by local courier, before we ship the order we wrap it and put it box. what is the journal entry when buy these packaging materials and what is the journal entry once consumed

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Question added by Losame Nosa , service adviser , Almunto
Date Posted: 2019/07/16
Mukesh Mishra
by Mukesh Mishra , Accounts Cum Admin Manager , XL Media Ltd Ghana

Packaging Material are not the part of inventory so instead of taking them to stock we will consider it as expenses. so Packing material will be under indirect expenses and journal will be Packagong material account debit to cash / Bank.

kamran khalid
by kamran khalid , Accountant , Callguard Security Services

1. Store Inventory Dr

    Supplier Payable Cr

 

2. Store Inventory Cr

    Packing Material Dr

 

3. Packing material Cr

    Income Statement Dr

Shafeeque MB
by Shafeeque MB , Manager , Al Yasat Holding Co. LLC

If you consider packing material as part of inventory

then

Dr Inventory of packing material 

Cr Suppliers 

- On consumption 

Dr Cost of Packing material 

Cr Inventory of Packing material 

 account closure entry 

Dr Income statement 

Cr Cost of Packing material 

 

 

If you choose to expenses it off

Dr Packing material expenses 

Cr Suppliers

account closure entry 

Dr Income statement 

Cr Packing material expenses

 

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