All transportation cost of the employees of a business firm, comes under the head conveyance expenses account. When the employees of a business firm spend money for visiting different places for official purpose, the amount spent by them for this purpose is allocated to conveyance expenses account. The amount spent for local visits only treated as conveyance expenses. The amount spent by company in respect of transportation for its employees from their residence to office and office to their residence, also is treated as conveyance expenses.

The conveyance expenses is different from conveyance allowance. In case of conveyance expenses only the actual amount spent on transportation of employees is booked but in case of conveyance allowances, a fixed amount is given to the employees irrespective of their actual expenditure.

Accounting treatment of Conveyance Expenses

a) In case, conveyance expenses paid in cash:-

Type of Voucher to be Prepared:- Cash Payment Voucher

Entry to be made:-

Debit:-    Conveyance Expenses Account

Credit:-   Cash Account

b) In case, conveyance expenses paid by cheque:-

Type of Voucher to be Prepared:- Bank Payment Voucher

Entry to be made:-

Debit:-    Conveyance Expenses Account

Credit:-   Bank Account

 c) In case of unpaid conveyance expenses:-

Type of Voucher to be Prepared:- Journal Voucher

Entry to be Made:-

Debit:-                 Conveyance Expenses Account

Credit:-               Outstanding Expenses Account

or

Expenses Payable Account

Treatment of Conveyance Expenses Account in final accounts

Conveyance expenses is an indirect expenses, Therefore, it is shown in expenses side of Profit and Loss Account.

Outstanding conveyance expenses is shown in liabilities side of balance sheet.

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