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How To Record Salary: Method A: Net Salary (Most Recommended)

The document describes three methods for recording salary payments in accounting: Method A (most recommended) uses journal entries to record employer contributions to EPF/SOCSO funds as liabilities, deductions from gross salary, and net salary paid. Cash payment vouchers are used to record payments to EPF/SOCSO funds and the employee. Method B uses a journal entry for employer contributions and a cash payment voucher to record gross salary paid with deductions to EPF/SOCSO liabilities. Method C is similar to Method A but uses additional journal entries instead of cash payment vouchers to record net salary and payments to EPF/SOCSO funds.

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Hazim Badrin
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4K views

How To Record Salary: Method A: Net Salary (Most Recommended)

The document describes three methods for recording salary payments in accounting: Method A (most recommended) uses journal entries to record employer contributions to EPF/SOCSO funds as liabilities, deductions from gross salary, and net salary paid. Cash payment vouchers are used to record payments to EPF/SOCSO funds and the employee. Method B uses a journal entry for employer contributions and a cash payment voucher to record gross salary paid with deductions to EPF/SOCSO liabilities. Method C is similar to Method A but uses additional journal entries instead of cash payment vouchers to record net salary and payments to EPF/SOCSO funds.

Uploaded by

Hazim Badrin
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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autocount Computerized Accounting Course Book

How to record salary


Method A: Net Salary (most recommended)

(1) create a Journal Entry (to record amount contributed by employer)


- debit EPF Account (expense), credit EPF Accrual Account (liability)
- debit SOCSO Account (expense), credit SOCSO Accrual Account (liability)

(2) create a Journal Entry (to record amount deducted from gross salary
- debit Salary Account (expense), credit EPF Accrual Account (liability)
- debit Salary Account (expense), credit SOCSO Accrual Account (liability)

(3) create a cash payment voucher (to record net salary paid to employee)
- select payment method, define cheque no (if any), leave the amount blank.(it will be auto
updated)
- for account no, select a salary account (key in net salary amount),

(4) create a cash payment voucher (to record payment made to EPF and SOCSO)
- select payment method, define cheque no (if any), leave the amount blank.(it will be auto
updated)
- for account no, select EPF Accrual Account… key in the total EPF amount
paid to EPF ( create another Cash Payment Voucher, do the same for
SOCSO Accrual)

Method B: Gross Salary – deductions of EPF/SOCSO/PCB

(1) create a Journal Entry (to record amount contributed by employer)


- debit EPF Account (expense), credit EPF Accrual Account (liability)
- debit SOCSO Account (expense), credit SOCSO Accrual Account (liability)

(2) create a cash payment voucher (to record salary paid to employee after deducted EPF &
SOCSO)
- select payment method, define cheque no (if any), leave the amount blank.(it will be auto
updated)
- for account no, select a salary account (key in full salary amount),
select EPF Accrual account (key in EPF amount deducted from salary in
negative form)
select SOCSO Accrual account (key in SOCSO amount deducted from salary in
negative form)

(3) create a cash payment voucher (to record payment made to EPF and SOCSO) same as
Method A
autocount Computerized Accounting Course Book

Method C: use Journal

(1) create a Journal Entry (to record amount contributed by employer)


- debit EPF Account (expense), credit EPF Accrual Account (liability)
- debit SOCSO Account (expense), credit SOCSO Accrual Account (liability)

(2) create a Journal Entry (to record amount deducted from gross salary
- debit Salary Account (expense), credit EPF Accrual Account (liability)
- debit Salary Account (expense), credit SOCSO Accrual Account (liability)

(3) create a Journal Entry (to record net salary paid to employee)
- debit salary account (key in net salary amount), credit Cash/Bank account

(1) create a cash payment voucher (to record payment made to EPF and SOCSO) same as
Method A

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