Accounting for fines and infringements

When an employee or officer of a company commits an offense while in professional activity , he or she may be fined. For best accountancy training Best school of accountancy In Lahore. If the vehicle belongs to the company, then the company is considered liable, and the company must pay the fine. The accounting approach is a bit special in this case.

For leaders

When an officer commits an offense and is fined, it is sometimes the company that pays. The offense must be recorded in writing . It can be recognized as an expense by debiting the Penalties, Taxes and Penalties account and crediting Account 512 , Bank. But this is not the only possibility: if the company is a company, then it is possible to register the fine in the current account of partner, and therefore debit account 4551 Associates Current accounts, and credit account 512 Bank.

It is up to the company to decide what it prefers. However, in any case, the fine is not tax deductible .

For Employees

When an employee uses a company vehicle in his professional activity , the fines are issued in the name of the company . It is therefore the latter who receives the minutes of its employees. As the company is legally the owner of the vehicle , it is the company that receives the ticket . It is totally forbidden to levy the amount of the fine on the salary of the employee at fault. However, the employer may request reimbursement by the employer.

The fines are then recorded by debiting account 6712 entitled Penalties, tax and penal fines, and crediting account 512 Bank.

Whether the fine relates to an officer or employee, it must be accounted for. It is an obligation!