Here are Gas and oil expense journal entry. Gas and oil expenses are recorded to track the cost incurred for fuel and oil used in business operations. These expenses are typically recorded under operating expenses.
Example of Gas and Oil Expense Journal Entry
Let’s say a company pays ₹5,000 for gas and oil on 25-07-2024.
Journal Entry Format:
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 25-07-2024 | Gas and Oil Expense | 5,000 | Payment for gas and oil | |
| 25-07-2024 | To Cash | 5,000 | Paid in cash |
Explanation:
- Gas and Oil Expense (Debit): This increases the expense account, reflecting the cost of gas and oil used.
- To Cash (Credit): This decreases the cash account, showing the cash outflow for the purchase.
If the expense is paid on credit:
Let’s say the company purchases gas and oil on credit.
Journal Entry Format:
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 25-07-2024 | Gas and Oil Expense | 5,000 | Purchase of gas and oil | |
| 25-07-2024 | To Accounts Payable(Party) | 5,000 | Amount owed to supplier |
Explanation:
- Gas and Oil Expense (Debit): Increases the expense account.
- To Accounts Payable (Credit): Increases the liability account, indicating the amount owed to the supplier.
Paying the Supplier Later:
When the company pays the supplier at a later date, the journal entry would be:
Journal Entry Format:
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| [Date] | Accounts Payable(Party) | 5,000 | Payment to supplier | |
| [Date] | To Cash | 5,000 | Paid in cash |
Explanation:
- Accounts Payable (Debit): Decreases the liability account, showing the payment to the supplier.
- To Cash (Credit): Decreases the cash account, reflecting the cash outflow for the payment.
Conclusion
Recording gas and oil expenses accurately ensures that the business’s operating expenses are properly tracked. This helps in budgeting and managing the overall costs associated with running the business.