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Company's sponsorship

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Ks

120 Points Posted on 12 February 2022

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.

CA. Abhilash Krishnan P

Chartered Accountant

325 Points Posted on 13 February 2022

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

sabyasachi mukherjee

Profession

19978 Points Posted on 13 February 2022

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.

prasad Nilugal

GST Practitioner & Accounts

8998 Points Posted on 13 February 2022

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 .