October 30, 2016 admin

Accrued Payroll

Liabilities and Net Worth

ACCRUED PAYROLL LIABILITY ACCOUNT
2410

ACCOUNT EXPLANATION
Salaries, wages, commissions, and incentives earned but not payable until a subsequent period.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Employees’ earnings for the current period, including salaries, wages, commissions and incentives for which payroll checks will be issued currently: PR
    Unapplied Time (unearned guarantees) 6740
    Commissions & Incentives—Salespeople—New   7000  
    Commissions & Incentives—Sales Managers—New   7010  
    Salaries—Salespeople—New   7070  
    Salaries—Sales Managers—New   7080  
    Salaries—Other—New   7100  
    Commissions & Incentives—Salespeople—Used   7200  
    Commissions & Incentives—Sales Managers—Used   7210  
    Salaries—Salespeople—Used   7270  
    Salaries—Sales Managers—Used   7280  
    Salaries—Other—Used   7300  
    Salaries—Parts (Managers, Other)   7600-
7610		  
    Salaries—Service (Managers, Other)   7700-
7710		  
    Salaries—Body Shop (Managers, Other)   7800-
7810		  
    Vacation & Time-Off Pay—Technicians (Service) (when paid holiday for technicians falls in pay period)   7790  
    Vacation & Time-Off Pay—Technicians (Body Shop) (when paid holiday for technicians falls in pay period)   7890  
    Salaries—Administrative   8000-
8020		  
    Inventory—Labor in Process (other than vacation pay)   1440  
      Accrued Payroll 2410
             
  Payroll deductions PR
    Accrued Payroll 2410
      Employee Deductions 2120
      Employee Income Taxes Withheld     2130
      FICA Taxes Withheld & Payable     2140
             
  Transfer of net payroll amount to payroll bank account CD
    Cash in Bank—Payroll 1002
      Cash in Bank—General 1001
             
  Checks issued to employees for net pay PR
    Accrued Payroll 2410
      Cash in Bank—Payroll 1002
           
  Remittance of payroll deductions CD  
    Employee Deductions   2120
    Employee Income Taxes Withheld   2130  
    FICA Taxes withheld & Payable   2140  
      Cash in Bank—General     1001
           
  Accrual of salaries, wages, etc., earned from end of last pay period and unpaid at end of month SE or PR  
    Appropriate expense accounts   Various
      Accrued Payroll     2410
COMMENTS
  • At month end, gross salaries, wages, commissions, and incentives earned to the end of the month but unpaid should be charged to the applicable expense accounts and credited to this account. On the first of the next month, a journal entry should be made reversing the month-end accrual.
  • An optional method of recording accrued payroll may be adopted. Posting of accruals and reversals can be eliminated by deducting the beginning reversal entry and adding the ending accrual to the normal Payroll Journal footings.
  • See Account 2411, Accrued Bonuses, for handling of dealer and employee bonuses.