Query regarding creation of Account Head

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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)

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)

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)

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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