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Security deposit accounting

28 September 2019

what is the entry when security deposit of employee is deducted from his salary?

Salary Dr
Security deposit Dr
To salary payable

Is the treatment correct ?

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7 Replies

Langesh Siva (Accounts Manager) (164 Points)
Replied 28 September 2019

Ya it can be acceptable it's caution deposit some companies are deducting for safety purpose, it should be refunded while relieve from the company,

1 Like

Kapadia Pravin (17249 Points)
Replied 28 September 2019

@ Riya
The entry will be -----
Salary Dr.
To Bank A/c
To Security Deposit A/c

1 Like

Riya Jain (8 Points)
Replied 28 September 2019

Okay.. Thank you sir

Suresh Thiyagarajan (Student) (3986 Points)
Replied 28 September 2019

1. Security deposit deducted from salary is for the purpose of security in case if the employee's action results in any uncertain loss to the company.
2. This deposit is in the nature of liability to the company and it should be returned to the employee at the time of his relieving from the company.
3. The proper accounting entry would be,
Salary Dr
To Security deposit A/c
To Bank A/c
Security deposit in the above case will go to the Liability side of the BS in companies Books.
Please correct me if the above solution has an alternative view.