Construction company related issue

Hi, our company dealing in Government construction projects and purchased consumables from its own like Gas for welding and wires.

As per the accounting method our company post these enteries in purchase account instead of Journal. Is posting these enteries in purchase instead of journal is corrent accounting or not as we are not selling anyhing instead we are only service provider.

Replies (7)

I do not think that makes any difference. You should be able to justify that those consumables are used for construction work.

Can you please provide me with the entry that company posts?

Entries for purchase of consumables  - 

Debit - Consumable Purchase A/c

Credit - Vendors A/c

(Being Purchase of consumables for the Project....)

What we doing is:


Purchase consumable material (Purchase Account)
To Weld projects (creditor)

The said entry posted in purchase 

Originally posted by : Priyanka
What we doing is:


Purchase consumable material (Purchase Account)
To Weld projects (creditor)

The said entry posted in purchase 

That is correct.

The said is correct.

To differentiate & identify easily it's better to open an Expense Journal with abbreviation as EJ &book these expenses in that so that extraction can be done whenever required. It will be a part of Journal type.

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