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– A company sells goods to another country abroad and pays the freight expense, then the seller charges the buyer with the freight expense only (without adding a margin).
Is this amount of freight expense recognised as revenue?– The salary of the manager increased in April, but effective in January. Is this change considered a change in accounting policy? How would the treatment change if the salary increase was effective in November of the previous period?
If sales tax is charged to the seller by the tax authorities, and the seller has included the amount together with the sales tax in the invoice to the buyer, that would count as revenue (net figure) in the seller’s records and would be recovered from the buyer.
In turn, the buyer will recover the tax as an input tax.
If no tax is chargeable on the freight cost when the seller raises the invoice, then I presume that it could simply be shown as an expense set off against the same amount when the invoice is raised (but I’m not 100% on that)
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