Question { Infogain, 8802 }

Advance paid to Employee 1000$. Employee incurred expenses
of 800$ and he returned 200$. What is the Accounting Entry?

Answer

Entry for Advance

prepaid expences....D/r
TO cash

Entry for Expenses Incurred

Employee exp A/c........D/R
To liability

Entry for Advance Adjustment

liability......D/R
To prepaid Expenses

for receiving remaining

Clearing a/c......D/R
to Prepaid Expenses

Cash A/c .....D/R
Clearing A/c