GRATUITY PAID

We Have Paid gratuity of 50000 thousand to our employee in  FY 2020-21 but no provision of gratuity was made in last FY i.e 19-20.

What is journal entry of above mention transaction. 

 

Replies (7)
Quick Summary
This discussion addresses the correct journal entry for a gratuity payment of £50,000 made in FY 2020-21, where no provision was set aside in the previous financial year. It explores the accounting treatment for both the initial provision and the subsequent payment, questioning the nature of the 'Gratuity A/c' and its potential impact on the balance sheet, particularly if a separate gratuity fund is maintained.

While making the first provision:

Gratuity A/c Dr.
To Provision for Gratuity A/c

b. While making payment to the employee Provision for

Gratuity A/c Dr.
To Bank A/c

1) For provision/liability:

Gratuity Dr

To Provision for Gratuity/Gratuity Payable A/c

2) For payment:

Provision for Gratuity/Gratuity Payable A/c Dr

To Bank A/c

What is head of Gratuity Ac

After passing above entry gratuity fund showing minus balance in liabilities side of balance sheet.

You didn't mention about the fund a/c earlier. If you maintain gratuity fund a/c, then you would have paid premium to the insurance company or trust etc right?
Gratuity paid to employee

What for do you have gratuity fund a/c? What entries do you have under the fund a/c?

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
18 September 2026
Accounts & Finance Specialist

ULTRA CHEMICAL WORKS

Thane

CA Final

View Details
Company
Featured ARTICLESHIP 06 October 2026
Semi Qualified

AJAY SINGH AND CO LLP

Thane

CA Final

View Details
Company
ARTICLESHIP 07 October 2026
Article Assistant

Malhotra Rajesh & Associates

New Delhi

B.Com

View Details
Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details
Company
19 September 2026
Finance Manager

Mugdha Art Studio

Hyderabad

CA

View Details
Company
19 September 2026
CA/Semi-CA/BCom

Pravin Sarvaiya

Mumbai

CA Inter

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details