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Journal entry for credit card payment

Amit Kumar (Accountant) (276 Points)

31 March 2014

Dear All,

I made a payment for credit card 12600 but there is no details were in opening balance sheet now we have made payment how can journalise this transaction pls reply with complete accounting entries. Awaiting for solutions

Thanks

Amit kumar

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9 Replies

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 31 March 2014

Sir,

You credit card a/c will always be nil at the end.

first form a credit card a/c in bank a/cand with that make entry for expenses in p&L.

after that settle the amount with bank or cash. Eg.

1.Priniting & Stationary Expenses A/C 1000

To Credit Card A/C credit 1000

2. Credit Card A/C debit 1000

to bank / Cash A./c Credit 1000

i hope answer is clear

Regards

Kunal Pansari (Accountant) (1037 Points)
Replied 31 March 2014

Reply to Manoj Ji

If he pass entry of Rs. 12600 in printing & stationary , wouldn't he need to produce bills for the same?

Originally posted by : Manoj Mehta

Sir,

You credit card a/c will always be nil at the end.

first form a credit card a/c in bank a/cand with that make entry for expenses in p&L.

after that settle the amount with bank or cash. Eg.

1.Priniting & Stationary Expenses A/C 1000

To Credit Card A/C credit 1000

2. Credit Card A/C debit 1000

to bank / Cash A./c Credit 1000

i hope answer is clear

Regards

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 31 March 2014

Yes,

if any expenses is made their should be a bill of it unless it is done for any personal use.

Regards

1 Like

Kunal Pansari (Accountant) (1037 Points)
Replied 31 March 2014

But here according to Amit Ji, he made the credit card payment on current financial year which he owe to bank last financial year. And also no credit card liability was shown in balance sheet of last year..

Originally posted by : Manoj Mehta

Yes,

if any expenses is made their should be a bill of it unless it is done for any personal use.

Regards

CMA Sanjay Hakhu (GM-Finance & Accounts) (65 Points)
Replied 01 April 2014

Income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods are called as Prior Period items.

Also, errors in the preparation of the financial statements of one or more prior periods may be discovered in the current period. Errors may occur as a result of mathematical mistakes, mistakes in applying accounting policies, misinterpretation of facts, or oversight.

Thus, the expenses incurred in the prior period need to be accounted for in the usual manner in the current period and then disclosed separately in the profit and loss account as prior period item.

Accounting entries would be:

Dr Expenses account

Cr Credit Card account

and then while making payment to Credit card outstanding bill

Dr Credit Card account

Cr Bank/Cash account

Of course you need to have bills to record the transactions.

The above treatment is as per Accounting Standard AS5

1 Like

Shivani (Learner) (1881 Points)
Replied 01 April 2014

Dear Members Will be open Credit Card Account under Current Liabilities in Tally? shivaniadream @ gmail.com

Vivek Khakhkhar (Assistant Audit Manager) (201 Points)
Replied 01 April 2014

yes it would be open under other current liabilities with control account creditors for expnses.

Manish Chopra (Clerk) (22 Points)
Replied 13 June 2017

You can login into your credit card account and fetch the statement directly. In case of issues contact customer support.

Chandrashekar (Team Lead) (29 Points)
Replied 24 February 2020

Thanks, Sanjay,

For detailed information.

In the case of multiple line items, Is it necessary to collect the bills for each line item? Does management have the right to fix thresholds, so can follow up for the bills only expenses which cross the cap?