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Voyage Accounting

Voyage Accounting ( An Introduction)

Voyage accounting is used to find financial results from the business of marine ship. Owner of marine ship uses it for transporting the goods and passengers. For completing the voyage accounting, accountant has to open voyage account for each traveling. All the expenses of voyage will be included in the debit side of voyage account and all the incomes of voyage will be included in the credit side of voyage account.

What are the Main Expenses and Incomes of Voyage?

a) Incomes 

1. Freight  : which is received for transporting the goods.

2.  Primage : This brokerage which is taken by the owner of marine ship for the good security of transported goods. It is the earning of owner of marine ship.

3. Passage Money : It is earning which is collected from passengers of marine ship.

b) Expenses 

1. Address Commission : This is the commission which is given by owner of marine ship to the person who gives new customer to the owner. It will be certain percentage of primage.

2. Port Charge : Charges to port officers for allowing marine ship to keep on the port.

3. Bunker Cost : Cost to operate the marine ship.

4. Insurance  : Premium of Insurance policy of special voyage.

5. Stores : Expenses of stores consumption.

6. Depreciation : Depreciation of the machines of owner of marine ship.

Voyage in Progress

Suppose one voyage has to complete by going to Landon from Mumbai and then return from Landon to Mumbai. At the end of year, if traveling from Landon to Mumbai is continuing, at that time, we have to calculate expenses and incomes on incomplete voyage and treat according to accounting rule.

(A) Receiving of Advance Income : We will deduct advance income of incomplete voyage from total voyage income or show in the debit side of voyage account

( B) Paying of Advance Expenses : We also will deduct advance expenses of incomplete voyage from total voyage expenses or show in credit side of voyage account

Example : A ship commenced its journey from Mumbai to Kolkata on 31st march on which date the accounts are closed. Ship was on her half way back to mumbai from Kolkata.

The details for the entire voyage to Kolkata and back were :

Freight Rs. 80000
Coal consumed Rs. 14000
 Salaries Consumed Rs. 6000
port charges Rs.3000
salaries of crew Rs. 8000
depreciation Rs.8000
insurance of ship Rs. 10000
insurance of freight Rs. 4000
address commission 5%

We could get only 30000 rupees freight on return.  Primage 10%.

Voyage Account

 Coal Consumed 14000         
Stores Consumed 6000   Primage 8000
Port Charges 3000  * Advance Expense on
Incomplete Voyage
Salaries of Crew 8000
Depreciation 8000
Insurance of Ship 10000
Insurance of Freight 4000
Address Commission 4400
<> Advance  income from
30000 + 30000 X 10%=

Net Profit
( Balancing figure)

115650 115650

Working Notes 

1) Primage = 80000 + 10% = 8000

2) Address Commission = 5% on freight + primage = 5% on 88000 = 4400

3) <> Advance freight on incomplete voyage = 30000 + 10% advance primage on

30000 = 33000

4) * Advance Expenses on Incomplete Voyage =

Address commission = 5% on 33000 = 1650

Insurance Advance premium of freight= 4000 X advance only freight / total
only freight

or = 4000 X 30000/80000 = 1500

because half is completed and half traveling is incomplete. So, it means 1/2 of all other expenses
are advance

1/2 of other expenses

coal consumed + store consumed + port charges+ salaries + depreciation +
depreciation + insurance of ship
1/2 X ( 14000 + 6000+3000+8000+8000+10000) = 24500
Total Advance Expenses = RS. 27650

Related : Containers Accounting


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Accounting Education: Voyage Accounting
Voyage Accounting
Accounting Education
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