Journal Entry

[Shunmas]

Hello !

I am trying to get my head around this. Can anyone help please ?

The driver's allowance from London to Manchester is 300. Any fine on his way has to be deducted from his allowance, lets say he incurred a fine of 50, which the company pays and then deducts from his allowance.

Can someone show journal entry please and tell me the nature of this fine account (for example driver allowance is expense, what would be the nature of fines because they are first paid by the company and then deducted from allowance).

Thanks for your help.

 

[Scalloway]

The cash payment of the fine would be debited to Fines Paid. The deduction would be credited to the same account.

Dr driver's allowance...300
Cr Allowances payable ......300

Payment

Dr Allowances payable ....250
Cr Bank...............................250

Dr Allowances payable .....50
Cr Fines paid .......................50

 

[Shunmas]

The cash payment of the fine would be debited to Fines Paid. The deduction would be credited to the same account.

Dr driver's allowance...300
Cr Allowances payable ......300

Payment

Dr Allowances payable ....250
Cr Bank...............................250

Dr Allowances payable .....50
Cr Fines paid .......................50

Thanks Scalloway, so would a compound j/e be:

Dr...Driver's Allowance 250
Dr...Fines 50
Cr. Bank 300 ???

Thank you for your support

 

[Scalloway]

Yes that would be ok

 

[MyAccountantOnline]

Do you need to do a journal?

Couldn't you simply enter the payment of £300 apportioning £250 to the driver and £50 to the fine?