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It means recording additional details while passing expense entries like Department and Location

 

It is normally done for Expense Entries like

Expense Dr

     To Party

and

Expense Dr

    To Bank

 

However,it is not done in entries like

Expense Dr

         To Bank

as there is no expense account

 

 

Example

Suppose we have received Telephone Bill for Noida Office of Rs 2500 from Airtel.Amount paid by cheque

We normally pass the entries

Telephone Exp Dr

    To Airtel

 

Airtel Dr

   To Bank

 

In this case,Cost Center is Noida which we can put only in first entry and not second like following

Telephone Exp Dr        2500

          Noida    2000-------------------->This is a cost center

                       To Airtel             2500

 

Airtel Dr                    2500

   To Bank                            2500

 

However,if we do directly

Telephone Exp

             To Bank

We can put cost center as follows

 

Telephone Exp Dr        2500

          Noida    2000-------------------->This is a cost center

                       To Bank            2500

 

 COST CENTER REPORTING ASSIGNMENT

1. Office files purchased for Mr Rajeev from Accounts Dept in Delhi Rs 1000 from Pooja Stationary Store by using office petty cash

2. Monthly wages paid to office sweeper for Noida Office Rs 400 by cash by Admin executive Priyanka and then claimed from company

3. Free lunch for emloyees on Christmas eve at Sagar Ratna arranged by Miss Sunita of Hr dept,Delhi ,Bill recd from Sagar ratna of Rs 8000

4. Conference Fees Invoice at Galaxy Hotel,Delhi Rs 14000 in which sales meeting of Noida emloyees was held

5. Printing bill from Vishal Printers for Calender distributed to clients by Sales Employees of Delhi Rs 20000

6. Rent for Noida Office Rs 20000 paid to Ansal Builders by cheque

7.Salary paid to different employees by cash as follows

EMPLOYEE CODE

EMPLOYEE NAME

DEPARTMENT

CITY

SALARY

E1

RAJEEV

ACCOUNTS

DELHI

10000

E2

PRIYANKA

ADMIN

NOIDA

12000

E3

SUNITA

HR

DELHI

8000

E4

SURESH

SALES

NOIDA

12000

E5

SANJEEV

SALES

NOIDA

8000

E6

HIMANSHU

SALES

DELHI

11000

E7

AJMAL

SALES

DELHI

9000

E8

ALFRED

OPERATIONS

DELHI

13000

 

 TOTAL

 

 

83000

 

  1. Accounts Tax
  2. Tally
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CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com.
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