Is entertainment allowance to an employee for entertaining business guests included/excluded in National Income?
Is entertainment allowance to an employee for entertaining business guests included/excluded in National Income?
Anurag Pathak Changed status to publish
No,
The entertainment allowance to an employee for entertaining business guests will not be included in the national income as it is an intermediate consumption expenditure of the business.
Explanation:-
entertainment allowance is just a day to day business expenses of the firm. The cost of it will be included in the final product and services of the firm.
The national income counts only the value of the final goods and services.
Thus adding entertainment allowance in the national income will lead to double counting.
Thus it will not included in the national income.
Anurag Pathak Changed status to publish
