Accounting entries

Hai, 

My company provides lunch to employees for payment basis without profit. Not any outside person supplies internally prepared.

Now my doubt is at the time of provisions purchase amt booked expenditure heads (staff welfare) after collecting amount from employees though salary is it reverse to same expenditure head ( staff welfare) or that amount shows as other income.  Which is right... Can u suggest me...

Replies (3)
Quick Summary
This discussion explores the correct accounting treatment for employee lunch schemes where the company provides meals to staff on a cost-recovery basis. The main question is how to book the initial purchase of supplies and the subsequent collection of funds from employees. Suggestions include booking purchases as staff welfare expenditure and then reversing this against the same head upon collection, or booking the collection as other income.

Purchases while booking grocery supplies and other income 

Thanks for ur suggestion. Purchase is book as expenditure and collection as shows in other income. P&l account expenses and income bothe reflect. Am I right sir.

 

 

Hi GVinod,

At the time of Purchase 

Expenses A/C Dr

To Cash/Supplier A/C   

At the time collecting amount from employee

Salaries & Wages A/C  Dr

To Income (Under Indirect Income)

To Salary Payable Account a/c (Under Current Liability)

 

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