Where would I post free staff meals on a trading and profit and loss account?? It hasn't been posted to an account as yet so would I post to subsistence and then include this on the trading side???
This is part of an assignment so I don't expect any one to give me the answer but just a pointer in the right direction would be great, as per usual none of the worked examples include a similar scenario.
Free staff meals I imagine means the company pays for the staff meals, and therefore is a staff cost to the company, so I would set up a ledger for staff meals and post it there.
I know you mentioned that it was just an assignment question, but I would reckon on something like:
If the staff meals are provided by the company i.e. company canteen? The immediate double entry would be DR Staff Meals and the CR income / trading account of the canteen.
The above answers are correct in their context, but you mention subsistence? which is why I ask for more clarity.
If you mean meals whilst travelling, then yes it should go to subsistence.
If you mean meals in a social way, ie staff night out, then it should go into entertaining.
If you mean everyday meals ie lunch from a canteen, then yes do as they have said above. This would include drinks as well.
One of my clients provides all Milk, Tea, Coffee etc... and occasionally provides staff breakfasts. I just put it all through the Canteen Nominal Code which appears in the General Expenses group on a summarised Profit & Loss.
Its part of an assignment and the notes which go with the trial balance say the hotel paid for staff meals to an approximate value of £1200. I than have to preapre the trading and profit and loss a/c and a balance sheet.
But for all my trying I cannot get the balance sheet to balance. I have included the figure in the P & L account, but have then wondered if it should go in the trading a/c but don't know if it would be classed as a direct overhead??? Any thoughts would be much appreciated
