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Excess salary paid

Bhavesh (Accounts) (899 Points)

07 November 2011

If one person has been paid excess salary in particular month. In next month we want to deduct the excess given in last month what will be the entry, Assume: excess given 2227 This month details : Gross 20058, PF 780, PT 200, and net must be 16851 all effective figures must consider in entry.

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Gaurav Singh (student) (496 Points)
Replied 07 November 2011

In my opinion,excess shall be taken as advance.Because salary is a term of contract.......

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Deepak Gupta (CA Student) (15922 Points)
Replied 08 November 2011

Originally posted by : Bhavesh C. Vyas
	If one person has been paid excess salary in particular month. In next month we want to deduct the excess given in last month what will be the entry, Assume: excess given 2227 This month details : Gross 20058, PF 780, PT 200, and net must be 16851 all effective figures must consider in entry.

When you paid excess salary of 2,227 to the employee, there will be debit balance in his/her account.

1) Advance Salary A/c............Dr. 2,227

To Employee A/c..................................................2,227

2) Salary A/c...............Dr. 20,058

To P/F.............................................................780

To P/Tax..........................................................200

To Advance Salary........................................2,227

To Employee A/c........................................16,851

3) Employee A/c.............................Dr 16,851

To Cash/Bank............................................................16,851

If you don't pass the first entry and credit employees account with 19,078 (20,058-780-200), then the net balance of the account will automatically be adjusted and balance outstanding will be shown as 16,851. But it will be better to pass the first entry, as it will give you more clarity later on.

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