Office canteen

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Shivani (Querist)
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17 September 2015 Dear Experts

A company has a canteen in office premises to service employees lunch/dinner etc.

Now employees eat from canteen, dont pay anything and whatever they have eaten gets deducted from their monthly salary as Canteen Deduction.

Now my query is what are the entries the company pass in its books with respect to canteen.

1) when canteen buys food material - Entry?

2) Is this food material current asset?

3) Entry at the time when employee comes, eats and go away?

4) entry at the time of deduction from salary?

regards

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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24 September 2015 Create Employee canteen expenses recoverable ledger under current assets and

when

1. Purchase the food materials for canteen pass the entry

Dr:Employee canteen expenses recoverable
Cr: Bank/cash

2. you cannot treat a food material under current asset. it is current asset as recoverable from Employee ( nothing but employee advance)

3.No need to pass any entry when employee taking food in canteen( just take record)

4.When deducting salary

Dr:Salary
Cr:Employee canteen expenses recoverable

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