Discussion:Employee purchases
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Discussion Forum Index --> Accounting Questions --> Employee purchases
| 24 June 2008 | |
| Hello All,
This is driving me nuts and I think I know how I should treat this, but I want to hear your comments..... To account for employee purchases, meaning, some of our employees may purchase safety glasses or an item off of a PO that contains other company materials purchases, we have an employee purchases clearing account that is set up as "Other Asset." On the PO, it is flagged on the item that it is an employee purchase. So, when my A/P gal gets the invoice in, she enters the voucher, sets up a payable debit employee purchases clearing , credit A/P. Then she will generate an invoice to that employee. Right now, the bill is set up to debit A/R, credit sales. I don't think we should book this to sales. I think we should credit employee purchases clearing so that account goes to zero, acting as a true clearing account. We had just set up this ledger and I am finding these things as I go along and reconcile each month. What are your thoughts? | |
Bushmaster (talk|edits) said: | 24 June 2008 |
| I would do this. Credit A/P for entire amount. Debit A/R employee for their part, debt inventory/purchases for balance.
When employee pays, credit a/r employee, reduce their paycheck or collect the cash. | |
Inagpurwala (talk|edits) said: | 24 June 2008 |
| I agree with your concept - MsTwizz. Instead of crediting Sales account, should be credited Clearing account.Inagpurwala 17:23, 24 June 2008 (CDT) | |
| June 25, 2008 | |
| I think it depends on what the state would say. Does the state the client is in consider those purchases as sales? If so, you would need to debit cost of goods sold rather than the clearing account. | |
Bushmaster (talk|edits) said: | 25 June 2008 |
| The other thing might be this. If the employer is in the retail business,(clothing, convenient store, etc.) these would really be sales.
Does the company sell similar items to outside customers? Or are you talking about General Motors buying welding gloves for their employees and some of them want to buy them from the same vendor for personal use? Sales tax gets invovled as well if the company isn't paying sales tax to the vendor. | |
