John (Accountant) (66 Points)
25 October 2010Hi Guys,
PF employees contribution is a deduction in the salary. so this should be booked as a liability and not as expenses i believe. am i correct in this ?
i tried this journal
salary ac. dr
To pf employees contribution(Liability)
but this makes salary as a profit and loss item and reduces the profit.
can anyone tell me the journal entry on how to book this as a liability.
sachin kakkar
(CA)
(188 Points)
Replied 26 October 2010
THE JE WILL B-:
SALARY A/C DR(INDIRECT EXP)
TO PF PAYABLE A/C(CURRENT LIB)
TO SALARY PAYABLE A/C(CURRENT LIB)
AFTER THIS PASS A PAYMENT ENTRY IE.
SALARY PAYABLE A/C DR
TO CASH/ BANK A/C
HOPE IT HELPS
John
(Accountant)
(66 Points)
Replied 26 October 2010
well this entry will reduce the profit.
but is there any entry we can make which creates only liability ?
is this question correct or wrong ? Please suggest me
CAclubindia
