October 30, 2016 admin

Employee Deductions

Liabilities and Net Worth

EMPLOYEE DEDUCTIONS LIABILITY ACCOUNT
2120

ACCOUNT EXPLANATION
Amounts deducted from employees’ earnings for remittance to others, including union dues, insurance premiums, pensions, charitable contributions, garnishments, and savings bonds.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Deduction of group hospitalization premium from employees’ earnings PR
    Accrued Payroll 2410
      Employee Deductions 2120
             
  Payment to insurance company of premiums deducted from employees’ earnings CD
    Employee Deductions 2120
      Cash in Bank—General 1001
COMMENTS
  • Accounts in the 2121-2129 series may be used if separate accounts by type of deduction are necessary.
  • Any balance in this account at month end should be reconciled to the supporting information.
  • Where appropriate, written authorization for deductions should be obtained from each employee.
  • Income taxes withheld from employees’ earnings should be recorded in Account 2130, Employee Income Taxes Withheld.