How to Record Unallowable Fines and Penalties
Segregating fines and penalties from indirect cost pools as required by FAR 31.205-15.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Unallowable Fines and Penalties | Debit | 500.00 | - |
| Cash | Credit | - | 500.00 |
💡 Accountant's Note
Costs resulting from violations of federal, state, or local laws are strictly unallowable. They must be recorded in an account that is excluded from overhead and G&A pools.
Practitioner & Systems Framework
💻 ERP Architecture
Set up a system alert for any vendor descriptions containing keywords like 'Fine', 'Penalty', or 'Violation'.
⚠️ Audit Flags
Environmental fines or OSHA penalties buried in general office expense accounts.
📄 Required Documentation
Legal correspondence or ticket notice and the payment voucher.
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
Related Journal Entries
Defense, Aerospace & Government Contracting
Cost-Plus-Fixed-Fee (CPFF) Contract — Revenue Recognition as Costs Are Incurred
Defense, Aerospace & Government Contracting
Firm Fixed-Price (FFP) Contract — Cost-to-Cost Percentage of Completion Revenue
Defense, Aerospace & Government Contracting
Time & Materials (T&M) Contract — Revenue at Contractual Labor Rates Plus Material Cost
Discussion & Community Questions
Loading comments...