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Treatment of an itam received from winning a lucky draw

Raman (NONE) (32 Points)

29 March 2013

Suppose you are an accountant of a company and your colleague Ram is assigned to a task of purchasing cars for the use of company. While purchasing cars Ram has participated in a lucky drow organised by the supplyer and by chance(lucky enough!) end up with winning a gold coin. Now, as an accountant, how will you record( or not record, if so why?) this gold coin in the books of accounts of the company. Show journal entries. Thanks

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5 Replies

Anil Dandu (CA FINAL) (205 Points)
Replied 29 March 2013

I think it will shown as other income in the credit side of the P& L a/c

Raman (NONE) (32 Points)
Replied 29 March 2013

Thanks Anil for your view. but if we take it as 'other income' and 'transfer or close' it to p/l, what should have been the 'opening entry' in the first place( means first it should be recognised in the books as an income. After that we can transfer it to p/l. then what should be the entry for such recognition?)?