The company has paid the penalty but wants to charge it to employee by deducting his salary. What will be the accounting entries if the company does not want to show any penalty payments in its books.
5 Replies
Ankit Goel
(.)
(22 Points)
Replied 18 January 2021
Debit to employee at the time of payment of such penalty and adjust from his salary as per plan.
CA. Sourav Sarkar
(Chartered Accountant )
(24583 Points)
Replied 18 January 2021
Show it as indirect expenses
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 18 January 2021
Company paid penalty , have you received receipt of penalty in the name and address of the company ?. please Clarify .
Swati Gupta
(Finançe officer)
(26 Points)
Replied 18 January 2021
It was an added expense which the company had to pay to complete the transaction . It was decided to charge it to the employee by deducting his salary. Can we make an entry in the books showing it as though the employee made the payment.
Abdul Razak
(Accountant)
(95 Points)
Replied 19 January 2021
When expenses incurred
Particular Expenses A/C Dr
To Cash/Bank
When debit Penalty to Employee
Salaries & Wages A/C Dr
To Particular Expense
To Salaries & Wages Payable
Note : Deducting salary from employee against expenses incurred so expenses has to be credited, which is not actually expenses to company
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