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Very very urgent accounting query

manik (ca in practice) (420 Points)

17 February 2012

our co. had made a payment of rs 5.50 lacs on behalf of our client ,as a membership fees of golf club, how to deal with this entry and under wht head, any decided case law

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6 Replies

A learner (Corporate Accounts ) (345 Points)
Replied 17 February 2012

Dear Manik,

Accounting entry does depends on the terms agreed in the contract with your client like whether it is reimbursable or not.

Also depending upon the business nature of your company and frequency of such transactions it can take a suitable place in your chart of accounts. Information provided by you is not sufficient to comment upon.

It can be taken in to Business promotion expenses presuming your company is paying it for the services to be utilized by your client.

Thanks

" A learner"

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manik (ca in practice) (420 Points)
Replied 17 February 2012

ours is construction co, and we had paid the sum on belalf of the client ( his personal expenditure) and the same is not recoverable from the client.

Kolluru Krishna Murty (Partner) (315 Points)
Replied 17 February 2012

Yes as rightly stated by our friend it can be taken as Business Promotion Expenses,but for the purpose of IT the business expediency is to be proved.

kkm

A learner (Corporate Accounts ) (345 Points)
Replied 17 February 2012

Originally posted by : Kolluru Krishna Murty
	Yes as rightly stated by our friend it can be taken as Business Promotion Expenses,but for the purpose of IT the business expediency is to be proved. kkm

Agree with the same as suggested by Mr. Krishna

MAHENDRA KANTILAL TITA (Account Executive) (131 Points)
Replied 07 March 2012

Hi Every One.....

Because of this type of situations we can take signature in stamp paper which includes all type of expenses which we can take most in our favour and avoid penal action taken by IT i.e we have proof of signature on stamp paper....

Thanks...............