Accounting entry

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 August 2013 Dear All,

We have recruited one of employee for Rs 1 Lacs and nature of employment is as consultant
Break up is Rs 75 K towards professional fee, 25 K towards Rent free accommodation.
Now as a 25 K should i account under Rent expenses or Professional fees.

Please confirm the complete accounting entries

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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18 August 2013 Refer the agreement with the consultants. incase the rent provision mentioned in the agreement you can book the rent payment as Rent paid Others

Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2013 Its Rent Free accommodation provided to the employee as per the salary agreement.

My question should that part will come under the profession fee or rent expenses in employer books of accounts

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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19 August 2013 Query is confusing.. how the consultant become employee?. is there employee and employer relationship is there?

Querist : Anonymous

Querist : Anonymous (Querist)

20 August 2013 Dear Ramesh,

Sorry for confusion.

Company has recruited as consultant.

With break up remuneration as 75 K as professional fee and 25 K as Rent free accommodation. Professional fee will be paid to consultant and rent will be paid to land lord.

My question is is company should so 25 K as rent or professional fee

Regards

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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20 August 2013 It is not to be treated as professional fee and it can be debited as Rent free accommodation -Consultants under indirect expenses