Accounting entry - urgent please help

Debit to Conveyance/generator maintenace a/c and credit to sales a/c

reduce the inventory to that extent

Make Journal Entry for own consumption of petrol/diesel from stock.

Diesel/ Fuel Expenses Ac.... Dr.

                                 To    Sales Ac..

Dear Nisha,

If owner vehicle is being purchase on company name than entry will pass debit conveyance/deisel a/c & credit petrol a/c.

but vehicle in owner name onle than entry will pass on By. capital a/c & To, deisel a/c.

Originally posted by : Rajesh Verma
	Dear Nisha, If owner vehicle is being purchase on company name than entry will pass debit conveyance/deisel a/c & credit petrol a/c. but vehicle in owner name onle than entry will pass on By. capital a/c & To, deisel a/c.

I agree with Rajeshji.......because moment when you withdraw any kind of goods for the personal use of owner then it is in the nature of personal expenses & not in tne nature of business expenses. So you cant charge diesel used for the vehicle to p/L a/c. As far as diesel used for generator , there should be proper documention explaining consumption of diesel. Logic behind such limitation is if some one show ad-hoc consumption of diesel for vehicle or generator , & sell such diesel in black.......then rest of the story.....u know very wel. 

Dear Nisha,  First is it a proprietor or partnership co?. If the vehcile is in the company name, for proprietorship, debit the owner's name as currrent a/c and credit the diesel a/c. If it is partnership concern, debit conveyance a/c and credit the diesel a/c. If he gives cash, ttreat it as sales. Ok na.... correct?

Dear Nisha,

The following is the correct entry for recording the entries

Pass Journal Vouchers in Tally for the below:

Petrol used for Generator:

Generator Running Expenses A/c Dr. (Or appropriate head created by you for generator expenses)

        To Purchases A/c Cr.

If Petrol used by Owner is purely for personal purposes:

Drawings A/c (or) Owner's Capital A/c Dr.

        To Purchases A/c Cr.

If Petrol used by Owner is purely for official purposes:

Conveyance A/c (or) Car Running Expenses A/c Dr.

       To Purchases A/c Cr.

Justification for the entries:

Entry No - 1:

1. Generator Running expenses is debited as it is a normal operating activity of the business
2. Purchases is credited because it is used for in house consumption. Logically you need to reverse (or) credit purchase account to reduce stock and you cannot book sales because it is actually not a sale and also if it is a sale, it may attract VAT (Depends on the state you are in)

Entry No - 2:

1. Owner's capital account (or) Drawings account is debited as it is used for personal purpose
2. With regard to crediting purchase A/c, the above justification in Entry No-1 stands

Entry No - 3

1. Conveyance (or) Car Running expenses is debited as the car is used for business purposes and it is a normal operating activity of the business
2. With regard to crediting purchase A/c, the above justification in Entry No-1 stands

YOU CANNOT CREDIT SALES AS IT IS ACTUALLY NOT A SALE AND YOU HAVE TO CREDIT PURCHASES TO REDUCE THE STOCK.

Hope this helps

Mr Vignesh asolutely correct......

MR VIGNESH IS RIGHT

Mr.Vignesh is very much right!

MR VIGNESH IS VERY ...VERY... VERY... MUCH WRIGHT

Dear Nisha,

The query which have been asked by you, is if the stock ( Petol/ Diesel) has been used by the owner

of his personal consumptiion so, that should be treated as a drawings for the business because as per the Business Entity Concept the owner is different from the business so that should be shown as personal transaction of the owner, There by the entry is

                                          Drawings a/ c  Dr

                                                     To Purchase a/c

Note: The stock which was used by the owner should be deducted from the owner capital a/c in the balance sheet of the bunk while preparind as at date.........

Ledger Grouping : Drawings a/c under Capital a/c

Thanks for giving the opertinity to share the knowledge

Let me know  oblige at ur end.

Sir,

I have an commission income from life insurance business, which is amounting to Rs. 6.5 Lac. Which form of ITR will be applicable to me? Can I file my return as business income after allowing expenses i.e. Salary, Office Rent, Conveyance, Stationery, Mobile etc.

Please suggest.

Thanx.

Sir,

Am accounting accounts of petrol bunk. Sales of petrol bunk are exepmted from VAT so in the purchase entries can i show the input VAT or not