what is VPP and how is it treated in journal - Accountancy -

Question

what is VPP? and how is it treated in journal?

Manisha Arora · Accepted Answer

Value Payable Post (VPP): This is a system, under which sellers
sends the goods to the buyer through post office Buyer pays the
value of goods to the post and get the goods The extra amount
(charges of VPP) which is paid by buyer is known as cartage
paid
In response to your second query, the following example will help
you understand this concept more clearly;
Received a VPP from Sahil for Rs 20,000 and paid Rs 200 as
cartage

For this question, the following Journal Entry will be passed:

Journal Entry

Date
Particulars
L F
Debit
Amount
(Rs)
Credit
Amount
(Rs)

Purchases A/c
Dr

20,000

Cartage A/c
Dr

200

To Cash A/c

20,200

(V P P received and cartage paid)

Journal Entry
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)

	Purchases A/c	Dr.		20,000
	Cartage A/c	Dr.		200
	To Cash A/c				20,200
	(V.P.P received and cartage paid)