crossorigin="anonymous"> voyage accounting treatment of incomplete voyage best 01 ans

voyage accounting

voyage accounting
voyage accounting

Meaning of voyage:- When goods are transacted throughout the water way is called voyage. However these carrying ships contain some passengers from whom they get freight. These services are paid for by the rent. Whether they earn income from their customers but they have to incur some expenses. voyage accounting

Thus, we know when all expenses and incomes occurred in the business they are required to make accounts for the purpose of knowing profit and loss. So a voyage account is prepared which is similar to the profit and loss account. There is no difference in the method for preparing a voyage account. As some principles are used. All expenses are debited and all incomes are to be credited. This voyage account is as follows.

VOYAGE ACCOUNT 

To Bunker Cost
To Port Charges
To Address Commission
To Insurance
To Depreciation
To StoresConsumed
To Stevedoring Charges
To Lighterage
To Light House Charges
To Other Expenses
To Provision For Incomplete Voyage

To Net Profit ( if any )
XXX

XXX

XXX

XXX

XXX
XXX


XXX

XXX
XXX


XXX

XXX




XXX
By FreightOn Outward JourneyOn Inward Journey
By Primage( Calculated on Freight )


By Passage Money

By Voyage in Progress


By Net Loss( if any )

XXX
XXX


XXX



XXX


XXX



XXX
voyage accounting

EXPENSES of voyage accounting

  1. BUNKER COST:- Expense on coal, Diesel, fuel, fresh water are included in the Bunker Cost.
  2. Port Charges:- Which expenses are paid to the port authority is called port charges. It includes loading and unloading expenses.
  3. Address Commission:- such commission is paid to the agent who procure the business of the shipping company. It is mainly calculated on the freight including primage. It is debited to a voyage account.
  4. Insurance:- Premium of insurance is paid to the insurance company. Which insurance is taken for the ship company.
  5. Depreciation:- Depreciation, Repair and maintenance are also of the items of expense. So it is debited to a voyage account. Sometimes it needs to be adjusted as per the period of voyage.
  6. Stores:- Stores are hired for the purpose of stock. Which charges are paid for it, are known as expenses which are also to be debited.
  7. Stevedoring Charges:- Such charges are paid for loading and unloading charges on the ship. These are debited to a voyage account.
  8. Lighterage:- These charges are paid to small boats which carry cargo from the ship when it is far away from the bank of sea.
  9. Other Expenses:- Other expenses as salary to staff on ship, Commission of Manager. All these are also debited to a profit and loss account.

INCOMES of voyage accounting

  1. FREIGHT:- Such freight is charged from the customers for the use of its services of carrying the cargo is called freight. Mostly outward and inward journeys will be given, if possible.
  2. Primage or Surcharge:- It is charges which are calculated through the percentage in small portions on freight from the passengers. So customers have to pay freight and Primage charges.
  3. Passage Money:- If a ship carries some passengers from one port to another port along with the cargo it is called passage money. 

INCOMPLETE JOURNEY OR VOYAGE IN PROGRESS

A journey of a ship may be incomplete when the Accounting year comes to an end. Thus income and expenses concerning the incomplete journey are to be carried forward to the next year. Thus, Voyage in progress is to be computed by taking proportionate expenses of incomplete voyage. So it is necessary to arrive at the correct profit or loss of a complete voyage. voyage accounting

For such purpose, expense can be divided in two parts:

  1. Expenses basis on freight
  2. Expenses which are not basis on freight

( a ) Expenses basis on freight:-  First choose expenses based on freight and calculate the portion of expenses applicable on incomplete journey as following manner:

Expenses on incomplete voyage = Expenses based on freight ×Freight of incomplete voyage/Total Freight of the voyage

( b ) Expenses which are not based on freight:- Generally expenses vary according to the distance travelled or time. This portion is calculated which is applicable on incomplete voyage by using the below formula:

Expenses on incomplete voyage = Expenses not based on freight × Distance or time of incomplete voyage/Total Distance travelled or Total time taken

Now add the results of (a) and (b) for finding out the voyage in progress which will be credited to the voyage Account.

Note:- Freight earned and Preimage of incomplete voyage is called “Provision for incomplete voyage” and it is debited to the voyage account as a carried forward income.

Conclusion:- Thus, ship journeys might be completed or uncompleted during the financial years. But as per requirements they have to prepare a voyage account. Which disclose the profit and loss account. Some income and expenses are incurred in the voyage during the incomplete journey. Then these incomes and expenses are carried forward in the next year during the incomplete journey of the ship. voyage accounting

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voyage accounting
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