AA-10 Adjustment of Overpayment of Overtime

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Accounts Officer

717 Points Joined March 2023

Hi Respected Members,

Please help me out on following:

We pay overtime to our staff. we have an employee to whom we overpaid overtime amount which we want to adjust in his next month overtime. For example: his actual overtime was Rs.1,000 but we paid him Rs.1,500 and next month overtime is same Rs.1,000.

Please educate me how should we pass the journal entries for these adjustment?

Thanks in advance for your precious time to reply of this query.

Replies (7)

Sandeep Jain

Pivate

1477 Points Joined July 2019

1st senerio.

1 )overtime expenses Dr. 1000. (1st month)
Advance to staff ABC Dr. 500
Bank /Cash Rs. 1500

(2) Overtime expense Dr. 1000 ( 2nd month)
advance to staff Cr. Rs.500
bank/ cash Cr. 500

2. Senerio
Advance to staff Rs.1500 Dr.
Bank/ Cash Rs. 1500 cr.

overtime expense Rs. 1000 Dr
Advance to staff Rs. 1000 Cr. ( 1st month)

overtime time expense 1000 Dr.
Advance to staff 1000 Cr. ( 2nd month )

Advance to staff Rs.500 Dr.
Bank/cash Rs. 500 Cr.

sabyasachi mukherjee

27880 Points Joined May 2017

Adjustment or overpayment of overtime.

NARENDRA

ACCOUNTS MANAGER

2186 Points Joined December 2012

Too many accounting heads will mislead & will make you frustrated. If it is against salary , you should book it the same & if you paid more than it to the employee , debited it so that advance paid will be deducted from the next month .

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Accounts Officer

717 Points Joined March 2023

Sandeep Jain Sir,

Thanks for your kind reply.

I want to know that if we already booked the entry of overtime expense by Rs.1500 and we realize after payment that we have to pay Rs.1000 then what to do ? should we remove that entry and follow entries which you mentioned in 1st senario or is there any other way ?

please must reply.