Business Promotion Expenses means that all expenses incurred in respect of promotion of business. Though, all expenses relating to the advertisement and publicity also help to promote the sales of a business firm but there are so many expenditures which are not advertisement expenses even then they play very important role in maintaining  the prestige of the business firm.  For example:-

  1. Refreshment expenses for business clients.
  2. Gifts to the business clients on certain events.
  3. To sell the goods to the clients at special discount for their personal use etc.

Though, these expenses can be booked in Advertisement and Publicity Expenses Account but to have the idea of actual expenditures on these type of expenses, a separate head as Business Promotion Expenses or Sales Promotion Expenses  or Expenses With Business Clients is created.

Accounting treatment of Business Promotion Expenses

a) For expenses incurred in cash:-

Type of voucher to be prepared: Cash Payment Voucher.

Entry to be made:-

Debit:-          Business Promotion Expenses Account

Credit:-         Cash Account

b) For expenses paid by cheque:-

Type of voucher to be prepared: Bank Payment Voucher.

Entry to be made:-

Debit:-     Business Promotion Expenses Account

Credit:-     Bank Account

b) For credit expenses:-

Type of voucher to prepared :- Journal Voucher

Entry to be made:-

Debit :-   Business Promotion Expenses Account

Credit:-   Supplier’s  Account

c) For outstanding expenses:-

Type of voucher to be prepared:– Journal Voucher

Entry to be made:-

Debit:- Business Promotion Expenses Account

Credit:- Expenses Payable Account

Treatment of Business Promotion Expenses Account in Final Accounts

Business Promotion Expenses come under category of indirect expenses. Therefore, these expenses are shown in debit side of Profit and Loss Account.