Salaries due to clerk journal entry is Salaries Expense Account Debit The account representing the salary expenses incurred during the period, Salaries Payable Account Credit The account representing the liability for salaries that are due but not yet paid. When salaries are due but not yet paid, they need to be recorded as a liability. This ensures that the expense is recognized in the correct accounting period, even though the payment will occur later.
Key Concepts
- Salaries Expense Account: The account representing the salary expenses incurred during the period.
- Salaries Payable Account: The account representing the liability for salaries that are due but not yet paid.
Journal Entry for Salaries Due to Clerk
Example Scenario
Assume a company owes ₹20,000 in salaries to a clerk for the month of November 2023, and the salary is due on 30-11-2023 but will be paid in the next month.
Step-by-Step Journal Entry
- Record the Salaries Due
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 30-11-2023 | Salaries Expense | 20,000 | Salaries due to clerk | |
| 30-11-2023 | To Salaries Payable | 20,000 | Salaries payable |
Explanation
- Debit to Salaries Expense: This increases the salaries expense account, reflecting the salary expense incurred during the period.
- Credit to Salaries Payable: This increases the salaries payable account, reflecting the liability for salaries that are due but not yet paid.
Conclusion
Accurately recording salaries due is essential for maintaining precise financial records and ensuring correct expense recognition. Properly managing these transactions ensures that the business’s expenses and liabilities are accurately represented in the financial statements, contributing to better financial management and reporting.