I'm looking for a financial term that describes a bank account that's been set up by a company for non-business related expenses; travel, hotels, food, etc. Sort of like petty cash, but it could be large expenses too, so petty cash doesn't really fit. What term, slang or otherwise could be used for an account of this nature?
Sometimes a business must keep track of overhead expenses that can be used to determine the rates they will bill their customers especially the government.
When determining the rates they are allowed to charge the government they have to include direct costs and indirect costs. These indirect costs include allowable overhead and G&A. They can also include profit, but the government limits the maximum profit. Any unallowable expenses have to come out of profit.
Unallowable expenses include:
When they talk about meals and lodging being unallowable they are referring to those not needed to support the contract. If the contract expects the contractor to travel they will generally provide a travel budget that is separate from the amounts used to determine the hourly rate.
The term slush fund has the connotation of being illegal or hidden. Slush funds are used to bribe officials or are leftover funds that were supposed to be spent, and are now being hidden so that they can be misused at a later date.
I think you're confusing accounting and taxation. While some expenses may not be tax-deductible, they can definitely be accounted as business expense if the company chooses so. There's a special schedule to reconcile such differences on the business entities tax forms.
The company can definitely pay these, and put it as an "expense" on its balances. But in many cases you'll have a problem deducting it for the purposes of tax calculations. I.e.: same as your personal expenses - you're free to spend your money as you want, but some expenses can be tax deductible (e.g.: charitable contributions), and some cannot (e.g.: gifts to relatives).
Some expenses, while being tax deductible, will also be taxable to the payees. For example, look at what JoeTaxpayer says:
Gold toilet to the CEO would be a taxable benefit to the CEO (and deductible expense to the company as constructively paid salary), while paying for the customers in strip joints will probably be accounted as an expense, but not tax-deductible (i.e.: not reduce the taxable income for the company).
You can create separate expense accounts for expenses that will be tax-deductible and non-deductible, to ease your tax preparation and compliance efforts.