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Debit Expense (employee entertainment or employee welfare) credit bank/cash.
It could be treated as a staff welfare expense and could be posted as indirect expenses
Expenses related to recreational, social, or similar activities incurred primarily for the benefit of employees. Employee parties and company picnics fall into this category. However, expenses solely for the benefit of officers or major shareholders would not meet the qualification and would be subject to the 50% limitation. On premises food and beverage for employees. The food supplied in an employee cafeteria would qualify even though guests may occasionally be served in the cafeteria.
THIS COULD BE RECORDED AS ORGANISATION ANNUAL PARTY/ EMPLOY WELFARE EVENT IN THE JOURNAL BOOK.
Credit the bank account of the Bank Ledger from which the cheque for the expenditure has been given. Debit the account head "Employees Welfare". With the corresponding amount.
It should be recorded as staff wellfare in the books of firm.
