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Flight cancellation charges accountability

Prasad Shah (Managing Partner) (65 Points)

20 February 2013

In every Financial Year, we have several instances when partner's or employee's Flight Tickets are booked, but cancelled sometimes due to circumstances, so if flight ticket is Rs.5000, and we get refund of Rs.3750 and Rs.1250 is deducted by Airline as Cancellation Fee.

Please advise this Cancellation should be accounted as losses or under some other head?

Which account head should be created in Tally to account Cancellation Charges?

Please guide.

Thank you.

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10 Replies

anil jain (Partner) (1067 Points)
Replied 22 February 2013

Depending upon the nature of reason for cancellation, head of account can be debited.

If it is business decision, debit to Travel Exps Account.

If it is due to personal problem of someone, it can be debited to that person.

Rajendra (accountant) (35 Points)
Replied 28 November 2013

this is propriters firm.. and payment made by owner by personal credit card.. what will be entry??

Rajesh (Service ) (7576 Points)
Replied 28 November 2013

If the expenses are related to the business then that will be a part of business Expenses. If the owner paid any amount like this through his Debit / Credit Card, that amount should be refunded/ credited:

Travelling Expenses A/c Dr

To Cash / Bank OR Owner's personal Account (or) capital Account

In case there are so many charges paid on the cancellation you can create a seperate sub ledger account with named "Ticket Cancellation".

Rajesh

1 Like

Rajendra (accountant) (35 Points)
Replied 28 November 2013

Originally posted by : Rajesh
	If the expenses are related to the business then that will be a part of business Expenses. If the owner paid any amount like this through his Debit / Credit Card, that amount should be refunded/ credited: Travelling Expenses A/c Dr To Cash / Bank OR Owner's personal Account (or) capital Account In case there are so many charges paid on the cancellation you can create a seperate sub ledger account with named "Ticket Cancellation". Rajesh

thanks rajesh, can i make credit card ledger or i have to make entries with his personal a/c or cash

Rajesh (Service ) (7576 Points)
Replied 28 November 2013

R u paying whole credit card Bill from the Official bank account or cash ???

Rajendra (accountant) (35 Points)
Replied 28 November 2013

Originally posted by : Rajesh
	R u paying whole credit card Bill from the Official bank account or cash ???

making company exp. by owner personal credit card?

Rajendra (accountant) (35 Points)
Replied 28 November 2013

Originally posted by : omendra
	Originally posted by : Rajesh R u paying whole credit card Bill from the Official bank account or cash ??? making company exp. by owner personal credit card?

and makeing payment of credit card by cash

Rajesh (Service ) (7576 Points)
Replied 28 November 2013

If your are paying credit card payment you should debit personal a/c or Capital account of Owner from all the amount your paid against his personal expenses and debit all the expenses made for business.

Owner's Personal A/c (or) Capital A/c (from Personal Expenses paid) Dr

Expenses A/c Dr

To Cash / Bank

Rajendra (accountant) (35 Points)
Replied 28 November 2013

Originally posted by : Rajesh
	If your are paying credit card payment you should debit personal a/c or Capital account of Owner from all the amount your paid against his personal expenses and debit all the expenses made for business. Owner's Personal A/c (or) Capital A/c (from Personal Expenses paid) Dr Expenses A/c Dr To Cash / Bank

thanks for great information.. its really so helpful for me.

our business just started and our owner opened bank a/c( by company name) with 10000 and deposited 100000 bank... plz tell me is this company Capital?