Recording travel expense journal entry3/10/2024 ![]() Therefore, it depends on the business category in which the entity operates. That’s because those expenditures drive the business operations of the entity.įor Entities not falling into the above category, those travel expenses fall into the Marketing Expenses category, which is an indirect expense. The category of expenses depends on the nature of the entity’s business.įor Entities exclusively into the Marketing/Product Sales (not manufacturing), the Travel expense of a Salesman is a direct expense. (Being the travel charges incurred for ABC Manufacturing deal)įrequently Asked Questions 1) Are the Travelling expenses of a Salesman forms part of Direct or Indirect Expenses? Journal Entry for recording the Travelling expenses: So, the Credit, in this case, is the Cash A/c. These expenditures are paid immediately, and there might not be any bills or invoices. There might be instances where there is no requirement to recognize the liability like Meals, tips, parking fees etc. Here Liability Account is named Cab Charges Payable, Travel Charges Payable etc., based on the nature of the liability. Let’s see what’s the corresponding Credit.Ĭredit is for the Liability Account. As this GL is an expenditure Account, the appropriate accounting treatment is to debit this GL Account in the Journal Entry. Travelling expenses is a Nominal Account that flows into the Profit and Loss A/c. Parking Fees, Toll Charges, Cab Waiting Charges and Luggage Porter Charges What’s the Journal Entry?.Tips or Surcharge paid for using any of the above facilities as part of travel.Expenses incurred for the Meals, Communication charges and WIFI Charges. ![]() Air Fare and insurance charges, if any relating to the business travel.Directors Cost of travel to other City to attend some business meeting or Client meeting.Let’s see a couple of instances relating to travelling expenses Therefore, the purpose shall not be of personal nature.Įstimated reading time: 5 minutes Travelling expenses Examples: The purpose of travel shall be connecting to the entity’s business operations. The name itself indicates that this travelling expense relates to expenses incurred for travel by entity employees or directors.
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