Employee contribution (epf)
This query is : Resolved
Chiranjeevi Chintala
(Querist)
08 October 2013
Sir,
1. is Epf allowed as expenditure or not?
2. If Epf not allowed as expenditure, how to pass journal entry in books of accounts
Eg: Gross salary Rs.1,00,000/-
Salary advance 10000
Epf Rs.2500/-
A)Salary A/c.....1,00,000
To Advance 10000
To Epf payable(liablity) 2500
To salary payable 87500
(if epf allowed as expenditure)
B) If need not allowed as expenditure how to pass journal entry. please reply
1. is Epf allowed as expenditure or not?
2. If Epf not allowed as expenditure, how to pass journal entry in books of accounts
Eg: Gross salary Rs.1,00,000/-
Salary advance 10000
Epf Rs.2500/-
A)Salary A/c.....1,00,000
To Advance 10000
To Epf payable(liablity) 2500
To salary payable 87500
(if epf allowed as expenditure)
B) If need not allowed as expenditure how to pass journal entry. please reply
Nikhil Kaushik
(Expert)
08 October 2013
1. Employer's contribution to EPF will be allowed as an expenditure.
08 October 2013
Hi
EPF (Employer Contri.) is Expense.
Entry is:
EPF (Employer Contri.) Exp A/c Dr..
...To EPF (Employer Contri.) Liability A/c
While Making Payment of EPF..
EPF (Employer Contri.) Liability A/c Dr..
..To Bank A/c.
Thanks//VaibhavJ
EPF (Employer Contri.) is Expense.
Entry is:
EPF (Employer Contri.) Exp A/c Dr..
...To EPF (Employer Contri.) Liability A/c
While Making Payment of EPF..
EPF (Employer Contri.) Liability A/c Dr..
..To Bank A/c.
Thanks//VaibhavJ
08 October 2013
In your case entry will be..
Gross Salary A/c ..100000
EPF (Employer Contri.) Exp A/c.. 2500
..To Advance A/c..10000
..To EPF (Employer Contri.) Liability A/c..2500
..To EPF (Employee Contri.) Liability A/c..2500
..To Salary Payable A/c ..87500
Thanks
Gross Salary A/c ..100000
EPF (Employer Contri.) Exp A/c.. 2500
..To Advance A/c..10000
..To EPF (Employer Contri.) Liability A/c..2500
..To EPF (Employee Contri.) Liability A/c..2500
..To Salary Payable A/c ..87500
Thanks
08 October 2013
As per my opinion you should book your
Providend Fund entries this way.
1) Booking of salary & deduction of
Provident Fund form that.
Salary A/c Dr.
To Employee A/c Cr.
To Provident Fund (Employees
Contribution) A/c Cr.
2) At the time of Provident Fund
depositing to Bank which was collected
from employees
Provident Fund (Employer Contribution)
A/c Dr.
Provident Fund (Employees
Contribution) A/c Dr.
To Bank or Cash A/c Cr.
[After this entry Provident Fund
(Employees Contribution) A/c will be
ZERO]
3) Employer contribution to be transfer
to Profit & Loss Account as this is the
expenses for the organization.
Profit and Loss Account Dr.
To Provident Fund (Employer
Contribution) A/c Cr.
Providend Fund entries this way.
1) Booking of salary & deduction of
Provident Fund form that.
Salary A/c Dr.
To Employee A/c Cr.
To Provident Fund (Employees
Contribution) A/c Cr.
2) At the time of Provident Fund
depositing to Bank which was collected
from employees
Provident Fund (Employer Contribution)
A/c Dr.
Provident Fund (Employees
Contribution) A/c Dr.
To Bank or Cash A/c Cr.
[After this entry Provident Fund
(Employees Contribution) A/c will be
ZERO]
3) Employer contribution to be transfer
to Profit & Loss Account as this is the
expenses for the organization.
Profit and Loss Account Dr.
To Provident Fund (Employer
Contribution) A/c Cr.
Chiranjeevi Chintala
(Querist)
09 October 2013
Thank you and Thanks to all for reply
Message likes :
1 times
Chiranjeevi Chintala
(Querist)
09 October 2013
Employer Contribution is allowed as expenditure. its clear, but in case of Employee contribution (PF) is allowed as expenditure or not?
09 October 2013
Employee Contribution is not expense of company.
Its is deduction from salary hence liability of company.
Its is deduction from salary hence liability of company.
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