ACCOUNTING TRANSACTION

[NARAYAN SAHU]

Dear Sir, I am working in a manufacturing company. I have a small doubt.

One of our employee broke a tool which costs ₹ 2000/-. So management told to deduct that amount from his salary. Please suggest what will be the accounting transaction (Dr. A/c & Cr. A/c).

[Ganeshan Kalyani]

...recovery a/c - dr to employee a/c

AI Summary

Salary deduction for employee-caused property damage recorded by payroll recovery debited to Recovery Account and credited to employee account.
Deduction from employee wages for damage to employer property is treated as an internal payroll recovery: record the recoupment by debiting a Recovery Account and crediting the employee's account, reducing net payable salary as a bookkeeping mechanism to effect the employer's claim within company accounts.