Customers who fulfill certain terms in an order, are given gold coins of 1 gm, 2 gm, etc.
What is the accounting treatment for it? Is it to be added to indirect expense directly? Is it required to maintain any records of such gifts given?
When customers receive gold coins (e.g., 1 gm, 2 gm, etc.) as part of fulfilling certain order conditions, the accounting treatment typically falls under indirect expenses—specifically as part of sales promotion or marketing expenses. However, it’s important to classify it correctly based on your company’s chart of accounts and policies.
Yes, records of such gifts must be maintained—including customer details, order fulfillment criteria, value of the gift, and date of issue—for audit, tax, and internal control purposes.
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
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