Reimbursement of company expenses
Rose_Petal
Registered Posts: 3 New contributor 🐸
If a farmer spent £1200+vat on new fencing and a neighbour gave £500 towards the cost (nice neighbour who benefits from the new fencing) how should this be recorded in the accounts
Dr Bank
Cr Fencing expense
Or should it be credited to a sales nominal and then journalled out to the expense code?
Is it OK to directly credit an expense code for an amount received towards an expense as opposed to a credit note issued by a supplier or is it a big no, no? Also, is the £500 subject to VAT?
I know alot of book-keepers who all seem to do it different ways and I want to know the correct way of doing it.
Thanks everyone.
Dr Bank
Cr Fencing expense
Or should it be credited to a sales nominal and then journalled out to the expense code?
Is it OK to directly credit an expense code for an amount received towards an expense as opposed to a credit note issued by a supplier or is it a big no, no? Also, is the £500 subject to VAT?
I know alot of book-keepers who all seem to do it different ways and I want to know the correct way of doing it.
Thanks everyone.
0
Comments
-
Hiya
If your original entry for the £1200 was to debit the fencing account, then yes I would post a credit for the receipt from the neighbour (just a straight forward bank receipt)0
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