Tender fee (refundable and non refundable)
This query is : Resolved
23 January 2022
What will be the entry of Refundable and non refundable tender fees.?
02 August 2025
Sure! Here's how you can account for **refundable** and **non-refundable** tender fees:
---
### 1. **Non-Refundable Tender Fee**
* This is an expense to participate in the tender process and is **not recoverable**.
* **Accounting entry when tender fee is paid:**
```
Tender Fee Expense A/c Dr.
To Bank/Cash A/c
```
* Since this is a cost, it will be charged to the Profit & Loss account.
---
### 2. **Refundable Tender Fee**
* This is an **advance deposit** or a security deposit paid to participate in the tender and is **refundable** if the tender is not won or after completion.
* **Accounting entry when tender fee is paid:**
```
Tender Fee Deposit (Current Asset) A/c Dr.
To Bank/Cash A/c
```
* When the refundable tender fee is **refunded back** to you:
```
Bank/Cash A/c Dr.
To Tender Fee Deposit A/c
```
* If the tender fee becomes non-refundable (e.g., tender not successful or forfeited), it is treated as an expense:
```
Tender Fee Expense A/c Dr.
To Tender Fee Deposit A/c
```
---
### Summary Table
| Tender Fee Type | At Payment | On Refund | On Forfeiture/Non-recovery |
| ------------------ | -------------------------------- | ------------------------------- | ---------------------------------------- |
| **Non-Refundable** | Debit Tender Fee Expense | N/A | N/A |
| **Refundable** | Debit Tender Fee Deposit (Asset) | Debit Bank/Cash; Credit Deposit | Debit Tender Fee Expense; Credit Deposit |
---
---
### 1. **Non-Refundable Tender Fee**
* This is an expense to participate in the tender process and is **not recoverable**.
* **Accounting entry when tender fee is paid:**
```
Tender Fee Expense A/c Dr.
To Bank/Cash A/c
```
* Since this is a cost, it will be charged to the Profit & Loss account.
---
### 2. **Refundable Tender Fee**
* This is an **advance deposit** or a security deposit paid to participate in the tender and is **refundable** if the tender is not won or after completion.
* **Accounting entry when tender fee is paid:**
```
Tender Fee Deposit (Current Asset) A/c Dr.
To Bank/Cash A/c
```
* When the refundable tender fee is **refunded back** to you:
```
Bank/Cash A/c Dr.
To Tender Fee Deposit A/c
```
* If the tender fee becomes non-refundable (e.g., tender not successful or forfeited), it is treated as an expense:
```
Tender Fee Expense A/c Dr.
To Tender Fee Deposit A/c
```
---
### Summary Table
| Tender Fee Type | At Payment | On Refund | On Forfeiture/Non-recovery |
| ------------------ | -------------------------------- | ------------------------------- | ---------------------------------------- |
| **Non-Refundable** | Debit Tender Fee Expense | N/A | N/A |
| **Refundable** | Debit Tender Fee Deposit (Asset) | Debit Bank/Cash; Credit Deposit | Debit Tender Fee Expense; Credit Deposit |
---
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