30 December 2015
Dear Sir, On payment of Salaries I am making the following entry: Salaries Dr. 10000 (Gross) To Cash Cr. 10000 and Cash Dr.1000 To TDS Cr.1000 i.e. I am showing TDS as receipt on making Gross Salaries a/c. Whenever I am paying TDS I am making the Entry as: TDS Dr. 1000 To Cash Cr. 1000 Someone asked me to make entry as: Salaries Dr. 9000 to Cash Cr.9000 and on payment TDS Dr.1000 To Cash 1000
Please suggest me which one is correct. What are accounting methods. -Mohan
30 December 2015
You may follow your accounting method. However you can make the entries by inserting "Salary Payable A/c. You may do this in the manner - Salary A/c (Dr) 10000 To TDS A/c1000 & To Salary Payable A/c 9000. At the time of payment Dr Salary payable a/c and TDS A/c by Cr Cash/Bank A/c .
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