Query regarding creation of Account Head

This query is : Resolved

Guest

Guest (Querist)

17 February 2010 Dear Experts,

I may post my query, which is as under :

A is an individual.

A gives Rs.2000/- to his driver for meeting certain petty hospital expenses,

as the driver's wife has been admitted into the hospital for the delivery.

Now, I need to know the account head to be created including the narration for the said expense.

I shall wait for the reply of experts on the matter.

shrikant

shrikant (Expert)
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17 February 2010 Dear deekay

The answer is depend upon in which industry you are working, but generaly you have to pass following entries

1) Advance to Staff A/c Dr. Rs.2000
To Cash A/c Rs.2000
Narration : Advance given to staff for maternity medical expenses of wife

2)Medical Reimbursement A/c Dr.Rs.2000
To Advance to Staff A/c Dr. Rs.2000
Narration : Maternity medical expenses of employee wife reimbursement

Guest

Guest (Querist)

17 February 2010 Dear Shrikant,

I thank you for your immediate response.

I may mention the following facts :

A is an Auditor.

A is not going to recover the amount Rs.2000/- from his driver.

Now, I may expect you to give your views for me to proceed on the matter.

shrikant

shrikant (Expert)
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17 February 2010 It's allowed as expenses. Hence I also write-off as expenses, please see second entry

Guest

Guest (Querist)

17 February 2010 Whether we can say as

Staff Welfare Expense A/c Dr 2000
To Cash A/c 2000
(Narration : ..........As you have mentioned)

I would like to know whether the above expense can be accounted as 'Staff Welfare', as if we mention Advance to Staff, will be adjustable / recoverable in nature. Isn't it ?

I need your final conclusion after seeing my suggestion for Staff Welfare.

Thank you so much Shrikant.

shrikant

shrikant (Expert)
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18 February 2010 My friend its not staff welfare, it medical reimbursement. Staff welfare means expenses incurred for the employee and normally in working condition. So I thought its medical reimbursement. I show it as advance because we have to show to effect separately, you can journal entry suggested by you, it can be fine

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