Answer / ajinkya3089

1) If company has paid the salary then following condition
apply
salary is the indirect expenses of the company.and we have
posted entry as a profit and loss account Debit.....
to salary account
2) If company has not paid the salary to emplyoee then
following conditons apply
salary is outstanding of company
outstanding expenses we posted to the
current liablities of the company

i hope r u understood of this concept

ajinkya kamble
9766244989[ajinkyakamble.mba@mmcoe.edu.in]

Answer / guest

WHEN, SALARY PAID WITHIN THE PARTICULAR PERIOD
LIKE THAT SALARY OF APRIL MONTH, PAID ON 30 APRIL

AS PER THE IIIrd ACCOUNTING GOLDEN RULES :-

ALL EXPENSES & LOSSES ARE DEBIT
ALL INCOMES & GAINS ARE CREDIT

SALARY TO EMPLOYEE IS EXPENSES, SO

SALARY A/C DR RS.........
TO CASH / BANK A/C RS........

WHEN, SALARY PAID AFTER THE PARTICULAR PERIOD LIKE THAT
SALARY OF APRIL MONTH PAID ON 1 MAY , THAN ENTRY

ON 30 APRIL

SALARY A/C DR. RS..........
TO SALARY PAYABLE A/C RS..........(CURRENT LIABILITY)

ON 1 MAY

SALARY PAYABLE A/C DR. RS.............
TO CASH / BANK A/C RS........

NOTE : - IN THIS ENTRY , NOT INCLUDE , PF , ESI , P TAX , TDS , ADVANCE , ETC.


THANKS & REGARDS

PRAVEEN SHARMA

8130113611

praveenexport2@gmail.com

Answer / bharathi

When company paid salary to the employees it should be
treated as indirect expenses it will reflect in profit and
loss account.

The following entries to be passed in the books

Salary A/c
To Cash A/c

When Company not paid (to be paid) to the employees then it
should be treated as liability (because company has to pay
the salary to the employees - so it should be treated as
liability) it will reflect in Balance Sheet under the
coloumn Current Liabilities.

The Following entries to be passed in the books

Salary A/C dr (P&l a/c)
To Salary Payable A/c ( liability a/c)
(provision made for salary)

Once salary paid to the employees then the following entry
to be passed

Salary Payable A/c Dr.
To Cash/ Bank A/c

(Now the liability is nil) (provision which we have made is
cleared now)

Answer / anonymous

If Salary is of current year then we will treat it as
expense and entry will be:
P & L A/c Dr.
To Salary A/c

and then you transfer this amount to the payable account (it
means Ist u r creating liability and then doing payment) by
making entry:
Salary A/c Dr.
To Salary Payable A/c

and when you paid the salary then entry would be:
Salary Payable A/c Dr.
To Bank or Cash A/c


If you want to create laibility then entry is:
Salary A/c Dr.
To Outstanding Salary A/c

Transferring salary in payable or outstanding A/c means you
creating your liability whose entry already mentioned above.

Answer / moumita

While making the salary we pass 2 entries

1.Salary A/C ---Dr
To Salary payable A/c

2. Salary payable -- Dr
to Bank A/c

The above mentioned entries does not include PTax, and PF Portion. PTax and Employer's contribution to PF are considered as expenses to the company and on other hand Employee's contribution to PF is a Liability

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