Which of the following transactions shall be regarded as an Expense for the company?

Director has bought an expensive watch worth Rs 1,00,000 from the cash available in the company

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Payment of diwali bonus to employees

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Donation to a political party

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Repayment of principal amount of loan to bank

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Solution

The correct option is B
Payment of diwali bonus to employees

Employees are the part of business of the company as they help the company to earn profits. All the other items are not the expenses of the company.

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Similar questions

Q. From the following information compute the amount to be shown in Note to Accounts on Employees Benefit Expenses: Wages ₹ 5,40,000; Salaries ₹ 7,20,000; bonus ₹ 1,05,000; Staff Welfare Expenses ₹ 60,000 and Business Promotion Expenses ₹ 50,000.

Q. There are 2 companies - Company A & Company B. Company A has a Net Worth of Rs 1000 Crores while company B has a Net Worth of Rs 1 Crore. A customer owes Rs 1,00,000 to both the companies. For which of the companies shall this amount be material?

Q. Statement: Shalini made an application to the bank for a loan of

R s . 1, 80, 000

by mortgaging her house to the bank and promised to repay it within five years.
Assumptions:
I. The bank has a practice of granting loans for

R s . 1, 00, 000

and above.
II. The bank accepts house as a collateral security against such loans.

Identify which of the following items will be shown in the Notes to Accounts on Employee Benefit Expenses:

(i) Wages

(ii) Salaries

(iii) Office Expenses

(iv) Staff Welfare Expenses

(v) Entertainment Expenses

(vi) Bonus

(vii) Leave Encashment Exp

(viii) Expenses on Employees Stocke Option Scheme.

Give the necessary journal entries in each of the following alternative cases :

(i) Realisation expenses amounted to Rs. 500.

(ii) Realisation expenses paid by the firm amounted to Rs. 500 and the partner has to bear the realisation expenses.

(iii) 'A' one of the partners was to bear all the realisation expenses for which he was given a commission of 2% of net cash realised from dissolution. Cash realised from assets was Rs 25,000 and cash paid for liabilities amounted to Rs 5,000

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Which of the following transactions shall be regarded as an Expense for the company?

The correct option is B Payment of diwali bonus to employees Employees are the part of business of the company as they help the company to earn profits. All the other items are not the expenses of the company.

The correct option is B
Payment of diwali bonus to employees

Employees are the part of business of the company as they help the company to earn profits. All the other items are not the expenses of the company.