Become a Certified GST Practitioner. Batch begins 18th Nov. Register Now!

AA-48A-Record Expenses by Single Account Head Wise Or Supplier/Vendor Wise

My Videos (Accounts Officer ) (717 Points)

11 February 2024

All Respected Members,

Hope all of you are doing well with good health.

Please educate me on following:

How should we record expenses ? In single account head or in each supplier/Vendor account ?

For Example: we take repairing and maintenance services more than 1 supplier/vendor during a year. So. Should we record these expenses entries in single account head like "repairing and maintenance expense account" or should we make each supplier/vendor account under group of repairing and maintenance account and then record entries in related supplier/vendor account ?

Thanks in advance for your precious time and efforts to reply this query.

Reply
Follow
Share

15 Replies

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 11 February 2024

Yes, If the "REPAIRS AND MAINTENANCE" Expenses is only one...

Upgrade to CAclubindia Pro. Subscribe Now!

My Videos (Accounts Officer ) (717 Points)
Replied 11 February 2024

Dear Raja PM Sir,

Thanks for your reply.

please let me know if it is more than what should we do?

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 11 February 2024

More than means...??

Ask with details

Manish (CA) (1167 Points)
Replied 11 February 2024

Both can be done.

Sample journal:

Expense Acc. Dr.
To Vendor 1 Acc.

---

Expense Acc. Dr.
To Vendor 2 Acc.

---

Expense Acc. Dr.
To Vendor 3 Acc.
To Vendor 4 Acc.

---

Vendor x Acc. Dr.
To Bank/Cash Acc.

prasad Nilugal ( GST Practitioner & Accounts ) (14690 Points)
Replied 11 February 2024

You have pass separate entry each vendor, because you have to mention, Invoice numbers, date and other details, which are different for each Vendor ,even though repair and maintenance expenses are same for each Vendor. ( you can not pass combine entry) , take more Opinion on this.

Upgrade to CAclubindia Pro. Subscribe Now!

My Videos (Accounts Officer ) (717 Points)
Replied 11 February 2024

Originally posted by : RAJA P M
	More than means...??Ask with details

More than mean If we are taking repair and maintenance services from more than one vendor. In that case should we use only one account named "Repair and Maintenance Account" to record respective entries?

Note;:

If we use above procedure, we will mention vendor name, invoice/bill no and other details in narration.

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 11 February 2024

Yes, You can account all vendors bills in that one head.

You can pass entries as per Mr Manish reply...
You can give details as per Mr Prasad Nilugal reply...

Note;:

(If we use above procedure, we will mention vendor name, invoice/bill no and other details in narration)

You just enter in narration like actual works done in that repairs and maintenance head...

--> REPAIRS AND MAINTENANCE is a Ledger account. You can account Under this ledger

--> Vendor (s) is another ledger. You can account separate vendors bills in their separate account.

--> In Tally You can enter the invoice number, Date itself in the Bill entry...

My Videos (Accounts Officer ) (717 Points)
Replied 11 February 2024

Dear Raja PM Sir,

Thanks for above detailed reply.

It is informed you that our firm is using Busy Accounting Software.

We can have record by both procedure (in single account head and in separate vendors ledger account).

Please let me know; what procedure is recommend by you to make record in better condition ?

Yasaswi Gomes new (Finance ) (4514 Points)
Replied 11 February 2024

Everything Is like that! You need two ledgers on your tally.

1. Repairs and maintenance (direct)

2. Repairs as maintenance (Indirect)

Me and @ Sabyasachi came to a conclusion few months ago.

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 12 February 2024

You need to record expense vendor wise. During audit expenses need to be analysed on vendor basis for scrutinizing violation of TDS or Sec 40A(3).

If you record all the transactions recorded as single expenses then you will find it difficult to bifurcate again at the time of audit.

So it is advisable to account in separate vendors ledger account

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

RAJA P M ("Do the Right Thing...!!!") (128091 Points)
Replied 12 February 2024

It is informed you that our firm is using Busy Accounting Software.

--> No issues, You can use any accounting software. All softwares is simplifying the acconts like multi more note books to system.
Same time All softwares based on accounting principles, only..

We can have record by both procedure (in single account head and in separate vendors ledger account).

--> That's account. Single expense ledger and number of supplier account.

Please let me know;
what procedure is recommend by you to make record in better condition ?
-->> Now, You correctly followed. so don't be doubtful...

GOOD LUCK...

My Videos (Accounts Officer ) (717 Points)
Replied 13 February 2024

Originally posted by : CA Rashmi Gandhi
	You need to record expense vendor wise. During audit expenses need to be analysed on vendor basis for scrutinizing violation of TDS or Sec 40A(3). If you record all the transactions recorded as single expenses then you will find it difficult to bifurcate again at the time of audit. So it is advisable to account in separate vendors ledger account

Dear Rashmi Gandhi Ma'am,

Thanks for detailed, knowledgeable and clear reply by giving practical example.

Thanks a lot.

1 Like

My Videos (Accounts Officer ) (717 Points)
Replied 13 February 2024

Originally posted by : CA Rashmi Gandhi
	You need to record expense vendor wise. During audit expenses need to be analysed on vendor basis for scrutinizing violation of TDS or Sec 40A(3). If you record all the transactions recorded as single expenses then you will find it difficult to bifurcate again at the time of audit. So it is advisable to account in separate vendors ledger account

Dear Rashmi Gandhi Ma'am,

Thanks for detailed, knowledgeable and clear reply by giving practical example.

Thanks a lot.

1 Like

My Videos (Accounts Officer ) (717 Points)
Replied 13 February 2024

Originally posted by : RAJA P M
	It is informed you that our firm is using Busy Accounting Software.--> No issues, You can use any accounting software. All softwares is simplifying the acconts like multi more note books to system.Same time All softwares based on accounting principles, only..We can have record by both procedure (in single account head and in separate vendors ledger account).--> That's account. Single expense ledger and number of supplier account.Please let me know;what procedure is recommend by you to make record in better condition ?-->> Now, You correctly followed. so don't be doubtful...GOOD LUCK...

Dear Raja PM Sir,

Thanks for your point wise reply.

Please let me know as ma'am Rashmi Gandhi advised, do you agree with her ?

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!