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.
7 Replies
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 15 April 2021
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
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
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 15 April 2021
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
Amit
(Accounts )
(528 Points)
Replied 15 April 2021
After passing above entry gratuity fund showing minus balance in liabilities side of balance sheet.
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 15 April 2021
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?
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 15 April 2021
What for do you have gratuity fund a/c? What entries do you have under the fund a/c?
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