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Credit Card expenses how to book in accounts

Credit Card expenses are common now days in fact, it is a kind of credit facilities and does not differ in accounting treatment. Goods bought on credit from the supplier in the same way, Credit Card expenses is accounted  into books of accounts This post will explain you how to book Credit Card expenses in accounts and in Tally.erp 9

Credit Card expenses | basic understanding

To book the the accounting entries for Credit Card expenses, one should understand the concept of credit card.

What is a credit card and how it works? who is paying the money, who is giving benefits who is receiving the benefits and what is the nature of benefits/expenses. The answer to above questions, will help in booking accounting entries for Credit Card expenses


Credit Card expenses | features of a credit card

A credit card is an electronic chip based card.

Credit Card expenses limit is pre-defined by the bank at the time of issuance of the card.

In fact, it is a facility by the bank like cash credit or a cash overdraft.

The bank will issue you statement on  monthly base and will give you certain grace period to pay the amount due on your credit card.

A credit card holder can use the credit card on  a POS ( Point of Sale) or over the web for online purchases or to incur expenses like booking traveling ticket, hotel booking, fuel filling in vehicle etc.

When a credit card is used for an expenses then card card holder does not require to pay any hard cash from his pocket, the card issuer bank will credit that amount to vendor.

Upon a pre-fix date the bank will issue a statement of all expenses made by the card holder which contains a due date for payment of the credit card dues to the issuer bank.

The Card holder pays the due on or before the due date, and one billing cycle comes to an end!

Credit Card expenses how to book in Accounts and in Tally?

The basic principle of accounting says debit the expenses and credit the person who is giving the benefit!

Let’s understand it with more clarity.

You made an expenses of booking a traveling air ticket on date 10.05.11

and paid the amount of USD 500 (INR Rs. 22000) through your credit card which is issued by your Citi Bank.

Here the travelling company or agent through whom you have booked ticket will mot come into picture because they will be getting the money of USD 500 from your city bank so it is not the person who is giving you the benefit.

It is your Citibank credit card company which is giving you a benefit or credit facility so, the Citi bank credit card ledger is credited by the amount of USD 500 or INR 22000! and the travelling expenses is debited!

The Citibank credit card ledger is created under current liability of sundry creditors for expenses as per user’s choice.

Similarly all expenses are booked from the statement of credit card and when the payment was issued, the Citi Bank Credit card ledger is debited and the bank through whom the payment  issued is  credited!

As explained above, I trust now it will be easy to book Credit Card expenses in Tally and accountancy.

Is your company, using Credit card for payment of expenses ? and if your company is using personal Credit card of your company’s directors and partner’s than how are you booking such expenses in your company Account ? Do share with us Credit Card expenses made by personal card of management?



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About the Author

Mahendra is founder and CEO of the I Vision Infotech, Authorised Tally Sales and Service Partner and helping Tally users to learn Tally and accounting free through this site

Leave a Reply 9 comments

madhavi - 5 years ago Reply

really i am unbelievable this. in personal view we are using credit cards but now company are using cc and enter those entries in accounts. thanks for knowing this . i like this type of new things to learn.

Azhar warsi - 5 years ago Reply

Really I know how to book credit card expenses,,,Thank you

rajesh - 5 years ago Reply

Really i was thinking such transaction as usual but your tips provided me a great boon to me. Thnaks o lot

venkatesh - 4 years ago Reply


venkatesh - 4 years ago Reply


kRISH - 4 years ago Reply

Dear friends,

My name is shameer- I am working in an MNC company.

This is the service company handling different contract of building maintenance.

Before that I was worked in trading company so here am really confused.

Here we have..

1- How to handle different projects in tally? I created one cost category- Under that I put different cost centers.

So every payments and receipts am selecting those cost center. Is it right way or not?

2-Parties ( Contractees- Customers) they are giving the deal for building maintenance.

My Doubt? Which kind of vouchers and entries I want to make for the Due and Receipt of money from them?

3-Sub contractors- We are giving some kind of work to them under this project.

Doubt? Which way I can make the payments to them? Under which account head they will be?

4-Purchase of Materials for the work- We r purchasing steel, stones etc from the different suppliers and shops credit and cash for the different projects.

My Doubt? Under which account head I can make them? Which voucher using for the payment of that particular purchase?

Some purchases are not related to projects , that time what can I do?

If you can Kindly advise me as a brother! also pls send me some example works?

I am really confused!


mahender kumar - 4 years ago Reply

helo sir
i am mahender kumar…..i read it about crdit card ……..but i want to say some thing …supose we issue the ticket for travelling by crdit card for copmpany….when we will pay the money before due date ok……so i think we are create the one leger of crdt card another of travelling a/c ……i think we are pas the j.v and first crdit give to crdit card and debit to tarvelling a/c when chenk is clear we are debit the credit card

Srividya Ganesh Deshpande - 3 years ago Reply

Dear Sir,

Can u help me about one question that answer i dont no, I know this is silly question,
But please help, Question are: when i entered in Credit Card Entry that time in amount raw coming two types first expenses ( example Highway Automobiles ) and second one is we deposit payment in Bank ( example Payment – Thank You — 17000 Cr.)
so, Both entries shown in tally, only Dr. side entry we do it, and Outstanding payment entry we do it pls tell me

And please help me.

With Regards

Shrividya G.D.

mr. jha - 9 months ago Reply


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