what is journal entry of provident fund - Printable Version +- Accountancy Forum (https://www.accountancy.com.pk/forum) +-- Forum: The Profession (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=4) +--- Forum: Accounting and Audit (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=7) +--- Thread: what is journal entry of provident fund (/showthread.php?tid=6022) |
what is journal entry of provident fund - raza125 - 06-22-2009 [what is journal entry of provident fund , will the salary be involved in the entry or there will be separate entry of provident fund and separate entry of salary? salary 2500 bank 2500 Providnent fund 251 bank 251 - faisal_desperado - 06-24-2009 Dear Raza125, When salaries are paid to the employees, employer deducts the employee's share of provident fund from salary and net salary (after PF) is paid to the employee. Employer's own contribution as well as deducted amount from employees salary are deposited for a specifid period with the proper authority. When salary is paid, the following entry is passed, (Assume salary is Rs. 5000 , deduction from employee's salary Rs. 500, & employer contributes equal amount) Salary Ac --------------------------------5000Debit Provident Fund (liablity Ac)-------------- 500Credit (Will be reflected in each individual employee's salary on credit side) Bank / Cash ------------------------------ 4500Credit Employer's contribution's entry will be Salary Ac ---------------------------------500Debit Provident Fund ( Liablity Ac)--------------500Credit <b>Alternatively</b> A compound entry may be passed as under, Salary Ac ------------5000+500---------------5500Debit Provident Fund (liablity Ac)----500+500------ 1000Credit Bank / Cash --------------------------------- 4500Credit <b>Effect</b> Salary of Rs. 5500 will be shown P&L Ac as an expense. Provident Fund of 1000 will be shown on the equity side of the balance sheet untill fully paid forthwith interest,if any, <b>At the time of payment</b>, Provident Fund (liablity Ac)-------------- 1000Debit Bank / Cash ------------------------------ 1000Credit Best Regards, - irfan kazim - 06-24-2009 AOA, welldone faisal bhai - Sayed Kaleem Jan - 02-23-2011 Thanx Faisal bhai. your knowledge sharing is quite appreciable and v are getting benifits of it. keep it up,sir. |