Employee Advances

This topic contains 2 replies, has 2 voices, and was last updated by Avatar of nokia nokia 2 years, 3 months ago. This post has been viewed 28 times

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  • Avatar of targetacca
    targetacca
    Participant
    • Topics: 20
    • Replies: 17

    our owner paid us salary in advance(from his personal account) before the end of the month on 24 th dec 2011. But on 7th jan 2012 he ll be paying us the full salary for each employee with the condition that we should pay him back after getting the salary. How should this be accounted for? entries pls.


    Avatar of targetacca
    targetacca
    Participant
    • Topics: 20
    • Replies: 17

    The salary will be paid from the company’s account


    Avatar of nokia
    nokia
    Moderator
    • Topics: 1
    • Replies: 63

    Though u have not explained the situation completely but still i m answering what i have understood

    Your owner paid u December’s salary on 24th dec right… the salary which he paid out of his personal account will not be entered in co’s books…

    Secondly at 31st december an entry wud b pased in co’s books debiting salary exp and crediting liability with the whole amount of exp for that month.. (assuming co’s G.L is updated at the end of every month for payroll expense)

    entry on 7th january wud be
    Liability Dr
    Bank Cr

    The cash which you wud be paying back to owner would also not be entered in co’s books… as owner and co both are separate persons..!!

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