Head to be debited ?

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Deepak (Querist)

03 November 2015 Dear Experts,

1)
If we pay certain costs like electricity, telephone, internet etc of Employees House then those costs needs to be debited to respective head of expenses or to salary account as perquisites.

Is the answer will be same - If the bill is in Company's name or in employee's personal name ?

2)
Finance Cost under Schedule VI covers Credit Card and Bank Charges ?

3)
"Heat, light and power" HEAD under schedule VI covers Petrol Used in Cars for Delivery of Products to customers and also Directors' Car Petrol Charges ?

PLEASE CONFIRM.

THANKS

REGARDS

Amol S Joglekar

Amol S Joglekar (Expert)

03 November 2015 01. if owned by Company : debit guest house charges OR employee's welfare charges or some such appropriate head as per the nature of expenses.
if owned by employee : it will be treated as salary (perquisite)

02. if the credit card is used for business purpose, then it can be covered under finance cost. if it is used for hotel expenses, it can not be said to be finance cost

03. "Heat light and power" are meant to represent the Direct Cost, as defined under the subject Cost Acountancy. Car petrol for delivery of products per se do not fall under this. So also car petrol of Directos.

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Deepak

Deepak (Querist)

03 November 2015 Thank u sir

Finance COst covers those Credit card charges also which are related to sales collection from customers ?

Amol S Joglekar

Amol S Joglekar (Expert)

05 November 2015 not really. They are administration charges rather than finance cost.

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