We are GTA (Private Ltd) and do transport services using the Trucks owned by our sub-contractors. We are paying the expenses such as Toll Charges and Diesel by Our Own Fastag and Fuel Cards on behalf of sub-contractors and adjust the same in the sub-contract payment.
For Example, If I go to account Fastag / Fuel Card Under the head Direct expenses in our book, the Journal entry will be,
While We recharging the Fastag / Fuel Card,
Dr Fastag / Fuel Card 1000 Cr Bank A/c 1000
While Adjusting the same with sub-contract payment,
Dr Subcontractor 900 Cr Fastag / Fuel Card 900
At the end, the closing balance will be Rs.100/- on Fastag / Fuel Card. As it is not our own expenses, Kindly please advise us Under which head, the fastag and Fuel card to be accounted for in our books because both have the closing balances at the end of year?
CAclubindia
