CA Foundation Exam > CA Foundation Questions > Salary payable to an employee Rs. 50,000/-.Wh...
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Salary payable to an employee Rs. 50,000/-. Which account is to be credited?
- a)cash A/c
- b)Salaries A/c
- c)outstanding Salaries A/c
- d)None
Correct answer is option 'C'. Can you explain this answer?
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Salary payable to an employee Rs. 50,000/-.Which account is to be cred...
Outstanding Salary A/c - will be credited. The reason stated below: When Salary is due & to be paid to employee means its outstanding Salary & Payable. Its liabilities for company. The Original entry is required to pass on the end of month or Due date; such as: Salary A/c Dr $50,00 To Salary Payable / Outstanding Salary. ( Cr) $50,00
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Salary payable to an employee Rs. 50,000/-.Which account is to be cred...
Which account is to be credited for salary payable?
The correct account to be credited for salary payable to an employee is 'Outstanding Salaries A/c'. This is because the employee has not yet received the salary and it is still outstanding.
Explanation:
Outstanding Salaries A/c is a liability account, which is used to record the amount of salaries that have been earned by the employees but have not been paid yet. It is a current liability and is shown on the balance sheet under the head 'Current Liabilities'.
When an employee has earned a salary but has not been paid yet, it is recorded as a credit entry in the Outstanding Salaries A/c. Therefore, when the salary is paid, the Outstanding Salaries A/c is debited and the Cash/Bank A/c is credited.
In this case, since the salary is payable to an employee, it is still outstanding and has not been paid yet. Hence, the Outstanding Salaries A/c should be credited with the amount of Rs. 50,000/-.
Conclusion:
In conclusion, when an employee's salary is payable, the correct account to be credited is the Outstanding Salaries A/c as it represents the amount of salaries that have been earned by the employees but have not been paid yet.
The correct account to be credited for salary payable to an employee is 'Outstanding Salaries A/c'. This is because the employee has not yet received the salary and it is still outstanding.
Explanation:
Outstanding Salaries A/c is a liability account, which is used to record the amount of salaries that have been earned by the employees but have not been paid yet. It is a current liability and is shown on the balance sheet under the head 'Current Liabilities'.
When an employee has earned a salary but has not been paid yet, it is recorded as a credit entry in the Outstanding Salaries A/c. Therefore, when the salary is paid, the Outstanding Salaries A/c is debited and the Cash/Bank A/c is credited.
In this case, since the salary is payable to an employee, it is still outstanding and has not been paid yet. Hence, the Outstanding Salaries A/c should be credited with the amount of Rs. 50,000/-.
Conclusion:
In conclusion, when an employee's salary is payable, the correct account to be credited is the Outstanding Salaries A/c as it represents the amount of salaries that have been earned by the employees but have not been paid yet.
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Salary payable to an employee Rs. 50,000/-.Which account is to be credited?a)cash A/cb)Salaries A/cc)outstanding Salaries A/cd)NoneCorrect answer is option 'C'. Can you explain this answer?
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