Re-imbursable Expenses

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APARESH GHOSH (Querist)
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27 July 2010 As per the agreement the assessee is incurring expenditure on behalf of the client and the client reimburses the expenditure some times fully and some times partly.Please discuss the Accounting Treatment with examples and state whether it is a Balance Sheet /P&L item

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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27 July 2010 Suppose Exp = Rs. 100/-
Reimbursement = Rs. 75/-

1. In case, you are not aware how much exp, you will get the reimb.

Book exp @ Rs. 100/- against cash or bank whichever applicable

On receipt of reimbursement : Debit cash or bank & credit the respective exp a/c.

Balance in the exp a/c is a PL item.

2. In case you know the amt of reimb & actually raise a reimb bill on the client.

Book exp @ 100/- to cash or bank.
Debit @ 75/- to client's a/c & credit the exp a/c on raising the reimb bill on client.

on receipt of 75/-. Debit cash or Bank & credit client account.

Balance in exp account is a PL item &
balance in client account is a balance sheet item.

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