The Book-keepers Forum (BKF)
The Book-keepers Forum (UK) -> VAT, Payroll & Tax -> Is the accounting treatment correct for this transaction?
Post Info TOPIC: Is the accounting treatment correct for this transaction?
aita


Newbie

Status: Offline
Posts: 2
Date:
Is the accounting treatment correct for this transaction?
Permalink  

An employee works in an accounting firm. The firm sends the employee to a client.
As a travelling expenses, employee incurs £100.
Employee asks the firm to repay him the travelling expenses of £100.
Whereas the firm asks the client to pay the travelling expenses of £(100 + V.A.T), i.e., £117.50.


JOURNAL ENTRIES:

When company makes payment to the employee:
DR Employee Expenses A/C £100
CR Cash A/C £100

When company raises an invoice to the client for the payment:
DR Debtors/Accounts Receivables £117.50
CR Sales A/C £100
CR VAT A/C £17.50

are these entries correct?

__________________
Summer


Member

Status: Offline
Posts: 24
Date:
Permalink  

Hi Aita

Your journal entries look fine. The only thing to note is that the employee expenses of £100 would normally be debited to the relevant expense account e.g. Travelling & Subsistence.

Summer

__________________
aita


Newbie

Status: Offline
Posts: 2
Date:
Permalink  

thanks summer

__________________
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum (UK) -> VAT, Payroll & Tax -> Is the accounting treatment correct for this transaction?
Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About