Tea/Coffee vending machine installed in office

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This discussion clarifies the accounting for a rented office tea/coffee vending machine. The rental charges should be treated as an indirect expense. Purchases of tea/coffee powder and other consumables are best booked under 'Staff Welfare' or 'Entertainment' expenses, as they are considered food items and not eligible for input tax. Any security deposit paid for the machine should be recorded under 'Deposits and Advances'.

Deepak

Deepak (Querist)
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02 January 2020 Hello Experts,

Please explain me what will be accounting treatment for purchase of Tea/coffee powder for Tea/coffee machine installed in office? This machine is on rental basis. What will be the correct ledgers to be prepared? Also how to show rental charges of machine?

RAJA P M

RAJA P M (Expert)
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02 January 2020 No need enter the machine in Your books... Rent for Vending Machine under indirect expense...

Deepak

Deepak (Querist)
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02 January 2020 What about purchase of Tea/coffee powder to be filled in that machine? under which head expense to be shown?

RAJA P M

RAJA P M (Expert)
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02 January 2020 It's also under Indirect expenses as Labour/Staff welfare Expenses

PARAS CHHAJED

PARAS CHHAJED

(Expert)
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03 January 2020 Expenses on purchase of pre-mix powder may be booked under staff welfare / entertainment. No input on pre-mix powder as it is food item.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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22 May 2020 Since it is on Rent Basis it is not an Asset and all the expense incurred for the same in regards to beverages should be debited to Staff Welfare Account. Monthly Rent is an Indirect Expenses. You might also have given some Security Deposit for the machine which will be treated debited to "DEPOSITS AND ADVANCES" in the books of accounts

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