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General Accounting Discussions: Please Help !

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    • CommentAuthorwajhiulhaq
    • CommentTimeSep 5th 2007 edited
     
    I am having difficulty in this problem:

    Alan has a salary of 4000 USD per month. He took 10,000 USD Advance from company and agreed on deduction of 1000 USD per month from his salary.

    1) What will be the entry when issuing Advance to Alan ?

    2) What will be the entry when salary is paid to Alan ?
    • CommentAuthorneo
    • CommentTimeSep 7th 2007
     
    1) What will be the entry when issuing Advance to Alan ?
    Dr. Due to Employee 10,000
    Cr. Cash (or Cash equivalents or cash in bank; depending what was issued) 10,000

    2) What will be the entry when salary is paid to Alan ?
    Dr. Salaries Expense 4,000
    Cr. Cash(or Cash equivalents or cash in bank; depending what was issued) 3,000
    Cr. Due to Employee 1,000
    • CommentAuthorgawalisjr
    • CommentTimeSep 28th 2007
     
    I believe the account on the company's books should be due FROM employee.
    • CommentAuthorabril
    • CommentTimeSep 29th 2007
     
    neo got the answers right but its "due FROM employees" - this is a form of receivables.

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