If a Manufacturing Co. deduct fine against Party for Safety Expense for Violation of Safety Rules then what will be the accounting treatment ? As we enter Expenses entry as follows :
Safety Expense A/c ......................... Dr.
To Party A/c
but during deduction of amount for Violation of Safety Rules entry will be as follows or not ?
Party A/c ............................................ Dr.
To Misc . Income A/c
Is there any Taxation effect occur in future ?
Please suggest.
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