Company's sponsorship

A company sponsors a trip to their dealer ( who increases company's sales )  total cost to company is Rs 1 lac for flight tickets ,Rs 50,000  for hotel ,15,000 for meals  ,Rs 25,000 for sight-seeing and other expenses so the company have to prepare  a separate ledger accounts for all hotel exp ,flight, food ??? And then transfer their balance to sponsorship account ??? Or directly debit the  sponsorship account

 

Replies (5)
Quick Summary
This discussion explores the correct accounting treatment for company sponsorship expenses, specifically for a dealer trip. The consensus is that these costs, including flights, hotel, meals, and sightseeing, should be treated as sales promotion or marketing expenses. While direct debiting to a 'Sponsorship' account is possible, it's recommended to debit 'Sales Promotion Expenses' and detail all individual costs in the narration for audit purposes.

It is not company's hotel , flight or food expenses, it is actually in the nature of sales promotion expenses so ideally it should be directly debited to sales promotion expenses
It's a part of marketing and sales promotion.
So expenses paid for the entire promotional expenses must be monitored and incremental revenue generated must be the key driver for growth of the company.
You can directly debit to Sponsorship account , however documentary evidence of all expenses are required , It is important for Audit purpose . write in narration reading different experiences .

please correct in my  above reply   " write in narration different  expenses incurred "

so we have pass entry like this 

sales promotion exp Dr     Rs 1 lac 

to cask/bank a/c Cr            Rs 1 lac  

and     in narration we have to explain this   like 50k for hotel ,15k food etc  i

correct  me if i am wrong !!! 

and also suggest me a good narration for this 

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