October 30, 2016 admin

Accrued Pensions

Liabilities and Net Worth

ACCRUED PENSIONS LIABILITY ACCOUNT
2422

ACCOUNT EXPLANATION
Employeer’s contributions accrued in accordance with the dealership’s pension plan.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly accrual of employer’s contribution to pension plan SE
    Pensions 8200
      Accrued Pensions 2422
             
  Pension payments to trustee including employee contributions CD
    Employee Deductions 2120
    Accrued Pensions 2422
      Cash in Bank—General 1001
COMMENTS
  • Employee payroll deductions under a contributory pension plan should be credited to Account 2120, Employee Deductions Payable.
  • Legal and tax advice should be obtained in connection with planning and administering a pension plan.
  • A subsidiary record, such as Form FMC 61, Prepaid and Accrued Expense Schedule, should support this account and should be used in computing monthly accruals.