salaries payable

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2010 Salaries are not paid Every month to all the employees. There is always pending salary. As and when we get payments, salaries are paid to some staff. Are we to pass a journal entry stating salaries a/c. dr to salaries payable to staff a/c every month and on making payment in the subsequent month, we make entry i.e. salary payable to cash. Is it okay or make a entry when only salary payment is made in cash. Then there will be one entry instead of two. Which is appropriate. Kindly guide

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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03 July 2010 Better you Dr:Salary to Salary payable and payment Dr:Salary payable to Bank. using credit to staff account create confusion, staffs are less ok but it is high or going to high in future it will difficult

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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03 July 2010 Yes, It is better to make entry first payable mode then paid.
By this way , you accounted gross salary a/c and net salary a/c of the employee in the safe manner. i.e if one person has taken advance. You can make entry
Salary Payable DR.
To advance to staff
to Cash / bank.
i.e you accounted full salary first, then deduct advance.
IF you make direct entry to salary to staff then it may create confusion, how much gross salary , how much deduction etc.

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