Account 151 – Goods in transit

1. Rules for accounting

a) This account is used to record value of goods, materials (raw materials, materials, tools; goods) purchased under ownership of the enterprise which are on the way of delivery, in ports, depot, bonded warehouses or have arrived at the enterprise but they are pending storing

b) Goods or materials under ownership of the enterprise, but not been stocked, including:

- Goods or materials purchased payment or acceptance of payment, but still in warehouses of seller, in ports, depot or on the way of delivery;

- Goods or materials arrived at the enterprise but still are verification for stock.

c) Goods in transit shall be recorded to account 151 according to original prices as prescribed in VAS ―Inventory"

d) Every day, when receiving purchase invoices, but the goods are not stocked, the accountant shall not keep records but compare them with economic contract and store invoices in a separate dossier ―Goods in transit‖.

Within a month, if the goods are stocked, they shall be recorded to account 152 ―Raw materials, materials‖, account 153 ―Tools", account 156 ―Goods‖ or account 158 ―tax-suspension warehouse goods‖ according to warehouse receipt and purchase invoices.

đ) If the goods are not arrived at the end of the month, they shall be recorded to account 152 "Goods purchased in transit‖ according to purchase invoices. The accountant must keep specific records of goods in transit according to every type of goods, materials, consignment or economic contracts.

2. Structure and contents of account 151 – Goods in transit

Debit:

- Value of goods or materials purchased in transit;

- Transfer of actual value of goods or materials purchased in transit at the end of the accounting period (if the enterprise accounts for inventories using periodic inventory system)

Credit:

- Value of goods or materials purchased in transit which are stored or delivered to customers;

- Transfer of actual value of goods or materials purchased in transit at the begin of the accounting period (if the enterprise accounts for inventories using periodic inventory system)

Debit balance: Value of goods or materials purchased in transit (not stored in the enterprise's warehouse).

3. Accounting methods for several major transactions:

a) The enterprise accounts for inventories using perpetual inventory system.

- At the end of accounting period, according to purchase invoices of goods purchased which are not stored in warehouse, if the input VAT is deductible, the following accounts shall be recorded:

Dr 151 - Goods in transit (prices without VAT)

Dr 133 – Deductible VAT

Cr 331 – Trade payables; or

Cr 111, 112, 141, etc.

- If the input VAT is not deductible, value of goods purchased shall include VAT

- Next month, when goods are stored in warehouse, according to invoices and warehouse receipts, the following accounts shall be recorded:

Dr 152 – Raw materials, materials

Dr 153 - Tools

Dr 156 - Goods

Cr 151 - Goods in transit.

- Next month, if the goods or materials purchased in transit which are not stored in warehouses but delivered to customers under economic contract at the seller's vehicle or warehouses, at ports, depot or delivered directly to customers, deposited at the agencies, the following accounts shall be recorded:

Dr 632 – Costs of goods sold; or

Dr 157 – Goods dispatched for sale

Cr 151 - Goods in transit.

- In case the goods purchased in transit are in shortage detected immediately or at the ending inventory, according to report on shortage, the value of deficiency or losses of inventories shall be recorded as follows:

Cr 1381 – Assets in shortage awaiting resolution.

Cr 151 - Goods in transit.

b) If the enterprise accounts for inventories using periodic inventory system.

- At the ending inventory, according to actual value of goods or material in transit which is transferred at the ending inventory before transferred actual value of goods or materials in transit at the beginning inventory, the following accounts shall be recorded:

Dr 611 – Purchase of goods

Cr 151 - Goods in transit.

- At the beginning inventory, according to result of inventory to determine actual value of goods or materials purchased but have not stored in warehouses (ending goods in transit), the following accounts shall be recorded:

Dr 151 - Goods in transit.

Cr 611 – Purchase of goods.

Source: Circular 200