Accounting for Containers

Accounting for containers is very important if you pack your product in containers before selling to your consumers. Containers may be box, drum, cylinder, bag or bottle. To calculate the cost of packaging and to record is very necessary. We can divide accounting for containers into two parts.

(A) When Containers are Non- returnable

When we sell the goods in containers, our customers do not return our containers. At that time, we use following accounting system :

(I) When no separate charge is made : 

In that situation, we add the price of packages in the sale price of products. We open a separate account "Package Stock Account"  in our books. We can calculate cost of consumption of containers.

= Opening stock of containers + purchase of containers - Closing stock of containers. 

If it is the part of cost of product, we transfer it to production account, if it is the part of cost of sale, we transfer it to profit and loss account.

(II) When a separate charge is made :

When we make a separate charge for non returnable containers, we will get profit from containers and it will be transfer to profit and loss account, we can calculate it with following way by opening package account.

Debit of package account = opening stock of containers + purchase of containers 

Credit of package account = amount of containers received from customers + closing stock of containers

Profit from containers = Excess of credit side over debit side of container account 

(B) When containers are returnable

( I ) When no separate charge is made

It means we sell our products in containers. Our customers get our products and return our container back to us. We should take tension of the containers which are in the hand of customers because we are not taking any charges. At that time, we divide total stock of containers into two parts, one is container stock in our store and other is container stock with customers. We pass following journal entries in our books :

a) For purchasing container stock

Container stock account Dr.

Cash/ bank/ creditor account Cr.

b) For goods sold in containers 

Customer account Dr.

Sale Account Cr.

c) When containers are returned by customers

Sale Return account Dr.

Customer account Cr.

d) When containers are repaired 

Container Stock account Dr.

Bank/ Cash account Cr.

e) When containers are destroyed or lost

Profit and loss account Dr.

Container stock account Cr.

e) Depreciation on container asset

Profit and loss account Dr. ( Depreciation)

Container stock account Cr.

( II ) When separate charge is made 

In this method, we will take some advance price and when our customer will return our container, we will return his deposit amount which will be less than advance price and difference will be our rent. If customer will not return our container, we did not repay his advance amount. If separate charge is made for returnable container stock from customer, we have to calculate following things

At this time we use one of following method

1. Stock and Trading Method

In this method we make four accounts for doing accounting treatment of containers.

i ) Container Stock account

This is real account and this account is opened for effective control over containers. Its proforma has been given below.

ii) Container Trade Account

This is account is made for knowing the profit or loss on containers.

Debit side of container trade account

a) Container Stock Account ( We add container retained, containers scrapped and depreciation)

b) Bank Account ( For repair)

c) Profit and loss account ( for profit )

Credit side of container trade account 

a) Hire charges account

b) Container deposit account

c) bank account ( Sale of scrap)

d) Profit and loss account ( Loss)

iii) Container Deposit Account

This account is also called container suspense or container provision account which is made in every method of accounting of container. This account is created on returnable price. Returnable price is just like a security which is collected from each customer. When customer will return our container, we will return his given security amount. We show security amount in our liabilities or we can deduct it from our debtors.

iv) Container Debtor or Customer  Account

Debit side of this account shows

i) Balance b/d ( Container stock with customers)

ii) Container deposit Account

iii) Hire Charges Account ( Rent received on returned containers)

Credit Side Shows

i) container deposit account ( Refund)
ii) Bank account ( Bal. figure)
iii) Balance C/d

2. Stock and Suspense Method

In this method, we do not open container trade account, we add container trade account in container stock account. Other container deposit account and container debtor account will open just like container stock method .

3. Trading and Suspense Method

In this method, we do not open container stock account. We add container stock account in container trade account. Other two accounts will open just like above two methods.



access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank banking Bank reconciliation basic accounting BBA benefits best bill black money blog bloggers book keeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting interest international Internet Introduction of Tally 9 inventory investment invoice IT Japan Job costing journal entries keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms. excel ms word Multicurrency Accounting multi currency in tally 9 mutual fund national security new and sacrifice ratio news new york times new zealand NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online accounting online application otcei pakistan parents pay pal pdf pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share Shares share trading shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally Tally.ERP 9 Tally 7.2 Tally 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching wikipedia working capital youtube
Accounting Education: Accounting for Containers
Accounting for Containers
Accounting Education
Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock