What is the goods in transit?

goods in transit are those that take place from the seller to the buyer, but are not physically held in the inventory of both sides. Some important concerns about liability and accounting are surrounded by transit inventory, as is known. The terms of sale should discuss these problems to ensure that the goods are reasonably protected and all participants in the transaction understand their rights and obligations. If a problem such as delay, loss or theft, when the products are taking place, both sides must be ready to solve it.

From an accounting point of view, goods in transit can create a problem, as the specifics of their ownership may be silent. Sometimes this is not a problem; If the goods are sent to the 10th and arrives 15. When they arrive, the buyer records them as an asset in the inventory. It may become a problem if the consignments move while closing the accounting period. Classically, this includes products that can take place between the end of Jingle and the beginning of another.

The seller may not want to declare goods in transit as an asset because it will be necessary to pay the tax for them. Buyers share this sentiment because they do not want to say that their own products that have not yet arrived and have taken tax liability. Within the Sales Act, the parties should discuss who for tax purposes their own products so that they can be properly announced on accounting statements. In these statements, the accountant notes that these are goods in transit, so they are correctly classified with other assets.

Responsibility can also be a problem. If the goods happen, the buyer can claim that the seller is responsible, while the seller may face the fact that the buyer now owns and is responsible for them. In the conditions of sale, the parties may discuss liability transitions. One may decide to keep goods in transit insurance which provided for loss and ensure that if products are lost, damaged or stolenny, they can be replaced without creating a financial burden for the buyer or seller.

transaction conditions may vary considerably. Some sellers can take full responsibility for products up to the buyer's door. Others deliver to the freight warehouse, shipyard or similar location and expect the sender to take over the liability for goods in transit, or inform the buyer that any insurance or liability coverage should be acquired at this time.