Accounting for Long Service Leave

[@tislam2407]

Very clearly explained. Thank you.

[@drdavebond]

You're more than welcome Tareq

[@yvettearchibald5224]

Hi David what happens when the person has been working for 18yrs in your example above

[@watermelon9488]

hey david, what if the closing balance is $1000, do you need to Dr provision of LSL, Cr cash or anything?

[@drdavebond]

It depends on what else has gone on. If staff who have earned LSL take it during the year, then you'll have Dr Provision Cr Cash entries taking place. If the closing balance is lower simply because of staff leaving, or some other effect, than you'd still Dr Provision, but you'd Cr a P/L account. The exact one would depend on the company.

[@IK-bk1vy]

I guess you already graduated or working elsewhere. if it was $1,000 it would then be Dr Expense of LSL $3,926 , Cr provision of LSL $3,926 or. if it has been used up it will be Dr Provision of LSL $3,926 and Cr Cash $3,926