Journal entry

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 December 2011 we have petrol bunk one dg set (machine)used in petrol bunk and daily we use diesel to dg set its expenditure to petrol bunk so how to show expenses if we debit the hsd & lubricants what we cr., its not sale or purchase it use for dg machine (i.e. for maintenance)is it capital expenditure or not

sharma.ctc@gmail.com

sharma.ctc@gmail.com (Expert)
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31 December 2011 (I didn't understand your question... but answering by believing that you are purchasing Fuels and then consuming it in your plant)

If at the time of purchase you have passed this journal entry...

Purchase A/c. Dr.
To. Cash / Supplier A/c.

then for consumption you will have to show this entry...

HSD & Lubricants A/c. Dr.
To. Purchase A/c.

Querist : Anonymous

Querist : Anonymous (Querist)

31 December 2011 sorry for confused you sir its not sale or purchase because petrol bunk has its own D.G. set so daily they use diesel for maintenance its expenses to the co.,na my query is that it is capital expenditure or not if we debit to hsd and lubricants what we will show for cr.,entry

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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31 December 2011 It is not capital expenditure. Capital expenditure is an expense which increases the life or output of an asset.

Diesel is consumed for running the DG set.

At the time of procurement, entry will be:

HSD & Lubricants (Indirect Expenses) Dr
To Cash/Supplier

No further entry will be passed at the time of consumption.

If you want to maintain stock of diesel, then maintain it manually.

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