Accounts

Save Share

This query is : Resolved

Rakesh Mittal (Querist)
Follow

23 November 2009 we have incurred an expenses for air tickets & hotels booked for Company's Guest & consultants (Not Employee).

Now question is that, in which head we have to book this exp ?

Regards

GSTP Hari Dhayalan Konar

GSTP Hari Dhayalan Konar (Expert)
Follow

23 November 2009 you may book the expenses as business promotion or sales promotion.

CA. Rishabh Mittal

CA. Rishabh Mittal (Expert)
Follow

23 November 2009 It seems to be a promotional expenses as they have been incurred on guests & consultants which are not the employee of company. Had they been the employee of company, they should have been charged to travelling & lodging exp.

Madhusudan Bohra

Madhusudan Bohra (Expert)
Follow

23 November 2009 In my opinion, it should be accounted as travelling expenses. As far as company is concerned, they have incurred expenses on travelling.

A regular visit by customer or supplier or auditor etc. can not be termed into business promotion expense.

Now the matter differs if it this travel is specifically incrred in relation to promoting the business. In that case, yes, it is promotion expenses.

Pl. comment.

Deepak.H

Deepak.H (Expert)
Follow

23 November 2009 As you have mentioned they are CONSULTANTS/Guests, it may be cases other than sales promotion.

Please let us know if you are recovering these expenses from their bills?

If yes then debit to their respective accounts.

Other wise it is Business Promotion Expense only.