As you all know that the wallets like paytm Mobikwik freecharge provides cashback on bill payments at times.
Now Mr X is a individual earning professional income and pays his telephone bill for his office through freecharge. Now in the month of March he pays his entire bill of Rs 1144 through freecharge. Freecharge was running an offer and they credited a cashback of Rs 100. Now in April he pays his bill of Rs 1144, this time using Rs 1044 from his debit card and the Rs 100 cashback obtained last month.
What is the accounting implication for this cashback ? How much shall be charged to telephone expenses ?
Accounting treatment according to me -
Only actual expenses should be charged to telephone expenses, so
1. Telephone expenses Dr 1044
Freecharge credit. Dr. 100
To Bank 1144
2. Telephone expenses Dr. 1144
T
CAclubindia
