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sayad (Executive)     07 May 2021

Account entry and ledger

Hi

small civil contractor if he gives cash to his staff supervisor to meet the expenses at the site like buying of small material , Payment to sub contractor and his own expenses at the site 

How to account such type of expenses and the cash given to supervisor from beginning and what ledger to create 

secondly some major purchases are made directly by the owner  how to account this  

and what if the supervisor make small purchase at the site will it be debited to purchase account and credit to  cash 

just in case when we buy on credit we debit purchase account and credit supplier account 



 15 Replies

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     07 May 2021

Open a cash in hand/ cash expenses ledger. Reconcile it with purchases, wages, petty cash accounts.

Small Purchases through will be capitalised if it is for production or building plant and reconcile this with purchases account. The above ledger can be used similarly for wages and miscellaneous expenses as well. 

Major purchases on cash can be taken through the above and reconciled with purchases. Credit purchases is normal procedure.

 

 

 

 

Raj C Doshi

Raj C Doshi (Practising CA)     08 May 2021

Dr. Purchases
Dr. GST
Cr. Supplier


Dr. Cash with Supervisor
Cr. Cash

Dr. Supplier
Cr. Cash with Supervisor

Dr. Expenses
Cr. Cash with Suspervisor

Dr. Subcontractor
Cr. Cash with supervisor
1 Like
V P Narasimhan

V P Narasimhan (Accounts Manager)     08 May 2021

Site Imprest   (Site wise)  Dr

To Cash

On submission of expense statements by Site incharge

Expenses (item wise) Dr

To Site Imprest (Site wise) 

The Balance should be available/tally with the Site incharge

 

1 Like
sayad

sayad (Executive)     08 May 2021

Thank you every one 

I used to enter below journal entries may b i was wrong

For giving cash to supervisor 

Supurvisor account debit to Cash account

 

At the end of the month supervisor gives expenses sheet at site 

 

For  Expenses incurred by supervisor at the site 

Expenses account debit  to supervisor account

 

For purchase related to site 

Purchase account debit   to  Supervisor 

 

Paymeny to sub contractor by supervisor 

 

Sub contractor account debit to  Supurvisor account

 

Is it corrcet way  to enter

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     08 May 2021

Cost accountants use cost sheets during WIP. That is what your doing. However, you can create the ledger called impress account or cash expense account

create debit and credit columns

when you draw cash from bank, on the debit side input ‘To bank’

when you spend money on small material- on the credit side input ‘By purchases/wages/petty expenses’ 

then tally the balances and c/f the balance on Debit side of the ledger. 

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     08 May 2021

I meant cash book, not cash expenses sry. No edit button.

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     08 May 2021

All the entries you wrote is real and it will work out. So you don’t need need ledgers then? Anyways, there are many other options, like, for example, if you have multiple supervisors, 

you can create a master cash ledger

Subledgers n supervisors names

reconcile subledgers with other accounts and finally reconcile subledger withmaster ledger. 

 

sayad

sayad (Executive)     09 May 2021

Thank u all i think i got more clarity i will manage now with journal entry issue 

 

Can someone tell me how to manage  below issue

We receive delivery challan from site supervisor on whts upp on same day of delivery of items  and the hard copy of delivery challan we receive from supervisor after a week of 15 days 

similary supplier will raise bill next day of delivery but will give hard copy of Invoice to our office next month 

Eg  Items supplied  on 1/ JAN  and and bill is raised by supplier on 5 / JAN and we are not aware of this bill  but we receive original Invoice in office by  5 / FEB  . How to account such bill  should we account  on date of Invoice  : 5JAN ( bill Raise Date  or  on 5/ FEB ( Bill Receive  Date in Office )

what system to follow in above case

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     09 May 2021

Delivery note issued is dealt with warehousing dept. however, in software accounting, the company policy can be anything ie., record transaction after purchase requisitions invoice is received, or suffice with delivery note and record transaction in purchases. There is a difference between receipt and invoice- https://www.patriotsoftware.com/blog/accounting/difference-between-invoice-vs-receipt/

the next part is invoices are required as evidence for filings. 

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     09 May 2021

I meant from the above, payments are made based n either delivery note or invoice as per invoice gst act time scales. 

sayad

sayad (Executive)     09 May 2021

Thanks yasaswi 

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     09 May 2021

Your welcome Mr. Sayad. It can be seen that in case of goods, an invoice has to be issued before or at the time of supply. In case of services, however, an invoice has to be issued before or after the provision of services. If the invoice is issued after the provision of service, it has to be done within the specified period of 30 days from the date of supply of service, as per invoice rules. 

https://www.cbic.gov.in/resources//htdocs-cbec/gst/tax-invoice-efliers.pdf

FYI

Rama chary Rachakonda

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)     09 May 2021

all expenses and sale of scrap etc. to be shown in the concern contract accounts. when certain amount paid advance to supervisor the entry should be: (1) debit concern contract account and credit cash account when balance amount is to be collected from the supervisor credit contract account and debit cash account .It means the difference amount is expenses of the concern contract.

yasaswi gomes

yasaswi gomes (My grammar is 💯 good I)     09 May 2021

Contract with customers also is a good way to represent the transactions. It will be easier if adopted to calculate expenses till date to determine the stage of completion. I didn’t work on those ledgers as well. Like this, bookkeeping is mandatory and different names methods can be adopted depending on the standard.


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