How To Journalize Commutation Tickets

By Kohei Hayashi

Instead of taking public transportation by using Pasmo or Suica, you can get a pretty good discount by using commutation tickets. For example, you can buy 11 Tokyo Metro weekday commutation tickets for the price of 10, and 14 commutation tickets for the same price for weekends.
But in terms of accounting, is it different from buying a regular ticket? I will explain how to journalize such transactions by using Cagamee.
There are 2 recording methods; one is recording on a strict accrual basis, and the other is a simplified method.

Recording on strict accrual basis

When purchasing commutation tickets
You should record the transaction on the balance sheet by using Supplies and Cash ledgers.

Purchased 11 weekday commutation tickets for 200 yen distance for the total price of 2000.

Account Debit Credit
Supplies 2000
Cash 2000
Entry on Cagamee
Recording commutation tickets purchase on Cagamee

When using commutation tickets
You should decrease supplies and expense it as travel cost.

The cost is not 200 yen per ticket, but 182 yen because you have to divide 2000 yen by 11 tickets. The consumption tax recording is also done when using, rather than purchasing, the commutation tickets.

Used one commutation ticket for a distance worth 200 yen.

Account Debit Credit
Travel 182
(including 16 yen consumption tax)
Supplies 182
(2,000 / 11)
Entry on Cagamee
Recording commutation ticket usage on Cagamee

Simplified method

The simplified method expenses the whole amount if the amount is relatively small.

Account Debit Credit
Travel 2,000
Cash 2,000
Entry on Cagamee
Recording simplified commutation ticket purchase on Cagamee

When using a simplified method, you should capitalize the remaining tickets when closing the book.

There are 6 unused commutation tickets at the end of the accounting period.

Account Debit Credit
Supplies 1091
(2,000 / 11 * 6)
Travel expense 1091
Entry on Cagamee
Capitalize commutation ticket on Cagamee

Even if you use the simplified method, it is advisable to record the usage dates and travel destinations for fraud prevention and tax inspection.