Journal entry

For a construction co., Cement is a Raw material. Treat this transaction as Purchase.

You should debit to purchase account and credited to vendor (in case of credit) or bank.

Rajesh

Originally posted by : manoj
	How's this ? Cement purchase on credit basis and for new road

My dear accountant friend , You have not mentioned in your question that its a credit purchase ? It never matters its for new road or old road...

Nature of purchase has to be seen

if it is for construction then to CWIP A/c

for repairs the repair & maint A/c

Cr to bank or party (if purchased on credit)

Dear Manoj,

If you purchase on Credit then entry is like this.

Purchase A/c Dr.

to Vendor A./c.

and passed consumption entry when it consumed in road construction.

If you use tally then go to stock journal and passed consuption entry.

If you Purchase on cash instead of Vendor A./c credit Cash or bank A/c.

Originally posted by : manoj
	How's this ? Cement purchase on credit basis and for new road

Dear Manoj,

Purchase Entry

Dr. Cement A/c

Cr.Vendor A/c.

(Being cement purchase for road constrution.) 

Dear Manoj,

Payment entry 

Dr. Vendor a/c

Cr. Bank / Cash A/c.

(Being amount paid to _____________ (vendor name) for cement purchase of inv.no. ______)