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Donations shown under profit & loss a/c?

sureshraj (employee) (356 Points)

29 December 2012

Hi,

greetings for the day!

An instance organisation give donation to truest, what is the accounting treatment and its shows under profit and loss a/c?

Thanks in advance.

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6 Replies

Saurabh Toshniwal (ca final) (2363 Points)
Replied 29 December 2012

Donation A\c Dr.

To Cash A\c or Bank A\c

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CA Gaurav Verma (Chartered Accountant) (65 Points)
Replied 02 January 2013

Donation A/c Dr.

To Cash/ Bank

(Being Amount Paid to ___________ on A/c of _________)

The donation amount will be shown on the debit side of the Profit & loss A/c. However while filing income tax Return the amount will be disallowed & the respective deduction have to be claimed u/s 80G.

Jag Bhushan Sharma (Faculty in a B-School) (633 Points)
Replied 02 January 2013

The journal entries given by both the participants are right. I am attaching a link wherein journal entries have been explained for your kind feedback.

https://www.youtube.com/user/jbsclasses

1 Like

Antony Jacob (FINANCIAL ACCOUNTANT) (30 Points)
Replied 16 January 2013

Donation A/c Dr. To Cash/ Bank (Being Amount Paid to ___________ on A/c of _________) The donation amount will be shown on the debit side of the Profit & loss A/c. However while filing income tax Return the amount will be disallowed & the respective deduction have to be claimed u/s 80G.

Read more at: /forum/donations-shown-under-profit-amp-loss-a-c--233126.asp#.UPZqiEw2CS8

V P Narasimhan (Accounts Manager) (791 Points)
Replied 18 January 2013

Dear

We use to open an a/c group head as "Expenses Disallowed" so that at the time of finalisation Auditor need not do a seperate excise to find out the above. If allowed Certificate are available for "Exemption" it need notbe clasified under the above. Gift also come under the above