18 December 2013
please help to solve accounting entry
one sales person buy some euro and made payment personally he went foreign visit made exp there and submitted his travel exp. in company
company gave his amount for euro perchase and travel exp.
how to make entry
1. purchase euro from local travel agency and made payment itself
2. payment received by person from company of euro and travel exp.
please let me know how to make both transaction entry in sales person ledger
regds
vishal
2.
18 December 2013
Dr.Cash A/c[for the amount paid for purchase of currency] Dr.travelling expences A/c Cr.Sales person A/c (being euros purchased by saleperson name for x purpose,and travelling expenses by sales person)
Dr.Sales person A/c Cr.Cash/BankA/c (being payment settled to sales person)
14 July 2024
Certainly! Let's break down the accounting entries for the transactions involving a salesperson who purchases Euros and incurs travel expenses, which are later reimbursed by the company.
### Transaction 1: Purchase of Euros by Salesperson
1. **Purchase of Euros from Local Travel Agency and Payment by Salesperson**: - Assume the salesperson buys Euros for a business trip. The entry when the salesperson purchases Euros would typically involve debiting the asset (Euros) and crediting the bank account or cash account used for payment.
``` Dr Euros (Asset Account) XXX Cr Bank Account (or Cash) XXX ```
- For example, if the salesperson purchases 1,000 Euros at an exchange rate of 1 Euro = Rs. 80, and pays Rs. 80,000, the entry would be: ``` Dr Euros 80,000 Cr Bank Account 80,000 ```
### Transaction 2: Reimbursement of Expenses by the Company
2. **Reimbursement of Euros and Travel Expenses by the Company**: - When the company reimburses the salesperson for the Euros purchased and the travel expenses incurred, it involves crediting the bank account and debiting the respective expense accounts (Euros and Travel Expenses).
``` Dr Travel Expenses (Expense Account) XXX Dr Euros (Asset Account) XXX Cr Bank Account (or Accounts Payable) XXX ```
- For example, if the company reimburses 80,000 for Euros and 20,000 for travel expenses, the entry would be: ``` Dr Travel Expenses 20,000 Dr Euros 80,000 Cr Bank Account 1,00,000 ```
### Explanation of Entries:
- **Purchase of Euros**: This records the acquisition of Euros by the salesperson. Euros are treated as an asset because they represent an amount of currency held. - **Payment to Local Travel Agency**: This reduces the bank account or cash balance because payment is made for Euros purchased. - **Reimbursement by the Company**: This records the company's payment to the salesperson for the Euros purchased and travel expenses incurred. - **Accounting for Travel Expenses**: Separate from the Euros purchase, travel expenses incurred by the salesperson are debited to the appropriate expense account when reimbursed.
### Note: - Ensure that all transactions are supported by appropriate documentation such as invoices, receipts, and expense reports. - These entries are based on the assumption that the salesperson uses personal funds initially and is later reimbursed. If the company advances funds directly to the salesperson before the expenses are incurred, the entries would be adjusted accordingly.
By following these entries, you can accurately reflect the purchase of Euros and subsequent reimbursement of travel expenses in the salesperson's ledger and the company's accounting records. Always consider specific company policies and accounting standards applicable to expense reimbursement.
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