a As a new bookkeeper for Just Accounts Pty Ltd you are stil

a. As a new bookkeeper for Just Accounts Pty Ltd, you are still learning about the operational policies of the company. You notice that several staff give you receipts for items purchased for office use:

o Mary $2.75 for Milk

o John $14.20 for cleaning products

o Stanley $12.50 for a stapler

o Chris $4.20 for stamps

The staff inform you that the previous bookkeeper would reimburse them by adding the amounts owed to their wages each month.

What alternative procedures could you adopt to deal with these relatively small expenditures?

Solution

Answer:

As per the details given above the expenditures are office expenses incurred by staff which are reimbursed to them along with their wages.In no situation these are wages expenses.These are purely office expenses or petty cash expenses which need to maintained seperately or clubbed together as miscellaneous expenses.

Including them in wages is an incorrect accounting method.