Sample of goods not returned by employee

This query is : Resolved

Ajay Pandey (Querist)
Follow

26 August 2011 Dear Sir,

I have a query related to Sample of stock given to Sales Person for Business Promotion on Returnable basis, not returned by employee after termination.

We have a Sales person Name Mr.Xyz and Handed over a Product B @ Rs.2000.00 for Display and Promotion. He leave the organisation without informing us. So we send a Show cause notice and later terminated him. But as he serve us for 10 days, we create a Liability for Salary for 10 Days. Now we have booked the Product @ Re.1 show we can track the inventory. But now there is a no chances of goods to be returned. In this case, what accounting entry to be passed to effect the inventory and books as we are going to adjust the same against salary liability. whether i should raise a invoice or debit note. in both the case, tax will get affected. there is any way so no tax liability is created as it is not a actual sale only entry to closed the FNF Account of the employee.

Regards,
Ajay Pandey

CA. Vikash Dwivedi

CA. Vikash Dwivedi (Expert)
Follow

30 August 2011 Dear Pandey Ji,

Section 630 of Companies ACt 1956 applies. an employees including past employee can not possess or use good of the company for the purpose other than given in the constitutional documents of the company.

It must be a company.