Priyanka (Audit team member) (200 Points)
12 June 2017Hi, 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.
CA Bijay Shrestha
(Never Give up....No matter what....)
(858 Points)
Replied 12 June 2017
I do not think that makes any difference. You should be able to justify that those consumables are used for construction work.
Sagar Devani
(Corporate and International Taxation)
(1174 Points)
Replied 12 June 2017
Can you please provide me with the entry that company posts?
CA Bijay Shrestha
(Never Give up....No matter what....)
(858 Points)
Replied 12 June 2017
Entries for purchase of consumables -
Debit - Consumable Purchase A/c
Credit - Vendors A/c
(Being Purchase of consumables for the Project....)
Priyanka
(Audit team member)
(200 Points)
Replied 12 June 2017
What we doing is:
Purchase consumable material (Purchase Account)
To Weld projects (creditor)
The said entry posted in purchase
CA Bijay Shrestha
(Never Give up....No matter what....)
(858 Points)
Replied 12 June 2017
| 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.
Sagar Devani
(Corporate and International Taxation)
(1174 Points)
Replied 12 June 2017
The said is correct.
V P Narasimhan
(Accounts Manager)
(791 Points)
Replied 20 June 2017
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.
CAclubindia
