In case refregerator given by any coke, pepsi, ice cream companies for storing coke, ice creams, choklates etc. to shopkeeper. Then how it deal in the books of companies.
Please suggest accounting treatment
Menu
Accounting treatment
Replies (16)
This type of refregirator are give by company parmanantly and it should be show as an asset of that owner of person.
otherwise its advt exp
Ao whats the final conclusion .?????
Accounting in books of company.. it should be shown as asset with the consignee!!
but if we give refrigarator to many shopes than what will the treatment ?
The same..asset with consignee.
It will be kind of lease(Operation or Finance as per the agreement or contract signed)
If given to many shopkeepers permanently then should be shown in profit and loss account in the debit side..
If only to some temporarily then asset to consignee..
Hope this cleared all yur doubts
The company can treat at as sales promotion expeses like, Advertisment Exp etc........ if it is not taken from that shop by terminating the business. Sometimes the shopkeeper will get this type of item in concessional rate, at that time its treated as a exp. If it given by lease, the company will treat the account in permenent nature.
@ Noufal if it is promotion exp what is the treatment?
in Company
Advertisement Exp A.c Dr (indirect Exp)
To Refregerator (Supplier party). (current liabilities)
in Shop
Refregerator A.c Dr ( Fixed Assets)
To Gift A.c ( Indirect income)
Thank you dear. . .
I think only financial transaction recorded in the book but as mr.NOUFAL said above and journalise the entry for gift
I think if he receive it as gift then show that in B/s with nominal value???
Dear vikram,
In the books of compay
Part I - if the refrigirator is given permanently to shop keeper without collecting money then it is
Treated as promotional exp..
PartII - if the company still enjoys the ownership on the refrigirator then only depreciation and maintainance exp and asset is disclosed in the balancesheet at wdv
Recent Topic
- Post office KVP income.
- Free GST invoice tool I built for my practice R
- Clarification on Gratuity Exemption under Section
- GOODS AND SERVICE TAX - GSTR 1
- Correct ITR form
- Clarification required on Section 393 & Report
- Professional advance taxes
- Surrender pan process
- Tds on deceased's pan
- Exempt income declaration schedule EI in ITR2 (AY2
Related Topics
CAclubindia
