Sale of Raw Material

[Pradeep Kaushik]

Respected all,

We are manufecturing Company.

We are supplying some parts (Raw material) to our vendors for reprocessing. After Re-processing the parts, our vender send back to us on his sales invoice.

Finally, we sales the complete finished parts to our Customer.

Please let me know:

What will be accounting treatment for Sale of Raw material to our Vendor.

Will this transaction be treated as Sales in our Books of Account. What is the impact on our financials.

Please Explain in Detail.

Best Regards.

Pradeep Kaushik

AI Summary

Sale of raw material treated as sales when invoiced to the customer; returned processed goods recorded as purchase.
If the supply of parts is made against the customer's purchase order and the company issues an invoice and debits the customer, the transfer is treated as sales; upon receipt of reprocessed goods, the vendor's invoice is recorded as a purchase.