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Inauguration expense game center

Others 1314 views 4 replies

1-service provided for free by a gaming center of the inauguration ceremony it is recorded as ??

2- does accounting in case of service sector is same as in case of trading/Manufactuing  sector    ??

Replies (4)

On your inaugauration, if someone performs for free, its nothing. You  dont have to record it not until you have tax consequence. Next query, reporting is the same for alll sectors and it does report expenses, losses, assets liabilities and equity. But its a differnt analysis in costing and they follow different methods and variables will change in the control acoiunts. 

i didn't understand please explain in detail sir 

happy diwali 

1. No entry in the Books of accounts for services provided free , as per the money measurement concept .

2.Bit of difference like direct expenses , stock in Trade between service industry and Trading and Manufacturing , otherwise Income, expenses, Assets, Liability, Capital are almost same.
( No Direct Expenses / Factory Expenses and Stock in Trade in service industry) .

If a gaming center provides free services during its inauguration ceremony, the expense is usually recorded as a Promotional or Advertisement Expense because it is done for marketing and attracting customers.

Journal Entry:
Promotional Expense A/C Dr
  To Service Revenue / Cash / Supplies A/C

The basic accounting principles for a service business are generally the same as for trading or manufacturing businesses. The main difference is that service businesses do not deal with inventory or production costs.

You can understand it easily by thinking about events like the dummies world cup, where companies may offer free access or bonuses mainly for promotion and customer engagement.


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