Employee benefits (perquisites accounting)

This query is : Resolved

Mickey pants (Querist)
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07 October 2016 Is this entry correct?

Employee benefits..........Dr
To EB Payable
(being, free accommodation provided to employee to the extent of rent)

Accounts Receivable........Dr
To Rent
(being accommodation rent due which was provided to employee)

EB payable ..................Dr
to Account Receivable
(being, perquisite set off)

IS this a correct way of accounting for perquisites or no entry should be made at all just perquisites need to be recorded in the salary sheet of employee for tax purposes.....

Thanks in advance

Amol S Joglekar

Amol S Joglekar (Expert)
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07 October 2016 This is NOT right. You can open perquisites account if you need to have the segregation of amount.
Debit Perquisite (Rent free accommodation)
Credit Rent payable (OR the Landlord)
when rent falls due

Debit Rent payable (OR The landlord)
Credit Bank
At the time of payment of rent (Subject to however, TDS if any, applicable)