Packaging Fees Journal Entry

Packaging Fee is charged by the marketing company from its client against the packaging (which is a part of Marketing Mix) of products. The trading company needs packaging of products in order to sale these in the market. That is why, packaging fees is charged and it is considered while pricing a product.

When packaging fees is incurred by the company’s business, then it is recorded as a Marketing expense in the Income Statement.

The journal entry to record packaging fees is shown below:

                                            Packaging Fees a/c  XXX

                                                                            Cash a/c / Bank a/c  XXX

                                                         (Paid Packaging Fees For Cash / Bank)

When Packaging Fees is accrued or payable or outstanding, then according to Accrual Basis of Accounting, we record the following below adjusting entry:

                                        Packaging Fees a/c  XXX

                                                                      Accrued Packaging Fees a/c  XXX

                                                    (Packaging Fees Payable for the Period)

When the company actually paid packaging fee, then the above entry is reversed.

 Accrued Packaging fees is recorded in the balance sheet as a Current Liability.