Easy Office
LCI Learning

Entries for salary provision

This query is : Resolved 

04 December 2016 Hi,
For salary, ICWA materials suggest that an accrual type entry is to be passed.

Salary Dr(P&L)
Outstanding Salary Cr(BS)

Outstanding Salary(BS) Dr
Cash Cr(BS)

But have talked to certain people and they suggest that provision entry should be passed for Salary although similar to that of accrual.

Salary DR(P&L)
Provision for Salary CR(BS)

Provision for Salary Dr(BS)
Cash Cr (BS)

Quick thoughts would be appreciated.

Thanks
Navjeet
















04 December 2016 Provision is made for the known loss or liability where amount can not be ascertained. In case of salary for the previous month, normally the amount can be calculated and ascertained correctly and therefore it become an Outstanding Expense

04 December 2016 In general and practically, Outstanding Salary account is opened and the same is being debited.
Provision is a term being used in that context.




20 December 2016 Thanks friends...appreciate your thoughts..

Cheers
Navjeet



You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

CAclubindia's WhatsApp Groups Link


Similar Resolved Queries


loading


Unanswered Queries