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22-Pension Contribution of Firm's Partner

My Videos (Accounts Officer ) (699 Points)

28 June 2023

Hi All Respected members,

Please educate me if a firm's partners are registered for pension and firm deposit contribution to the respective department, how it will be recorded in accounts ? Please share journal entry of it.

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

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5 Replies

RAJA P M ("Do the Right Thing...!!!") (128047 Points)
Replied 28 June 2023

Pension contribution means where...??

Generally :

If firm make any amount based on partner's own name (individually) then it will be account to the partner's Current Account). It's not in the firm's expenditure account.

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My Videos (Accounts Officer ) (699 Points)
Replied 28 June 2023

Dear Raja PM Sir,

as you know that we deduct some amount from an employee salary and include some amount into it and deposit it to pension department but as far as partners of firm are concerned how we record it when we don't pay them salary and full amount of contribution amount deposit to pension department from firm account ?

RAJA P M ("Do the Right Thing...!!!") (128047 Points)
Replied 29 June 2023

Well...

If the partner's salary amount deposited into pension scheme then it will be account as partner salary...

My Videos (Accounts Officer ) (699 Points)
Replied 29 June 2023

Raja P M Sir,

Thanks for your kind response.

I would like to ask that if firm's partners don't want to consider this contribution amount as salary and asked Accountant to pay us agreed salary amount and record this amount in any other account, in this case what will be the treatment of this contribution amount ?