Advance salary considered as bad debt

if a employee becomes untraceable after receiving advance salary for 2 years does the amount paid is considered as bad debt?
Replies (7)
Quick Summary
This discussion explores whether an advance salary paid to an employee who subsequently becomes untraceable can be classified as bad debt. The consensus is that if an employee disappears after receiving a significant advance salary, the amount is indeed treated as a bad debt. It's noted that such advances are initially recorded as an asset under 'Loans & Advances' on the balance sheet.

Wrong to be adjusted with expenses.
Then what is the treatment sir
Advance staff dr
Cash cr.

expenses for salary dr.
advance staff cr.
How much is the advance given and how is outstanding yet ?

Ageing ?
If a company pay 20 lac rs as advance salary to a employee and if he become untraceable then does it is considered as bad debt ?

Yes, it is a bad debt.

Advance Salary to Director accout will be under Loans & Advances ( Asset ) Side Balance sheet

 

 

    

 

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