Expenses & income · Level: Basics
Journal entry: Fuel for the company van
Fuel is a running vehicle cost; with a VAT invoice the input VAT is reclaimed.
Worked example
We fill up the delivery van for £60.00 plus 20% VAT and pay in cash.
Correct journal entry
Motor expenses £60.00, Input VAT £12.00 / Cash £72.00
Debit
Motor expenses£60.00
Input VAT£12.00
Credit
Cash£72.00
Why?
- Motor expenses: expense incurred → debit
- Input VAT: asset increases → debit
- Cash: asset decreases → credit
Calculation
- VAT: 20% of £60.00 = £12.00
- Gross amount: £60.00 + £12.00 = £72.00
Typical mistake
Debiting fuel to Vehicles: the asset account is for the vehicle itself only.
Your turn
Three problems on exactly this case, with different numbers. Amounts work with or without separators, e.g. 2,400.00 or 2400.
Transaction
We fill up the delivery van for £90.00 plus 20% VAT and pay in cash.
Debit
Assets up · expenses · liabilities down
Total debit£0.00
Credit
Liabilities up · income · assets down
Total credit£0.00
Frequently asked questions
What is the journal entry for fuel for the company van?
Example: Motor expenses £60.00, Input VAT £12.00 / Cash £72.00.
How do I recognise this case?
Fuel is a running vehicle cost; with a VAT invoice the input VAT is reclaimed.
What is the typical mistake?
Debiting fuel to Vehicles: the asset account is for the vehicle itself only.