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General Accounting Discussions: december payroll paid in Jan

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    • CommentAuthorchrysilizi
    • CommentTimeDec 28th 2007
     
    How do I handle "actual"Dec. payroll-paid in January of the next year?
    We closed for a week & got pd.vaca.pay & our previous weeks worth of hrs.pd. but when we return in Jan. it will actually be for the last week worked (when we cosed) ending Dec. 21, but will get paid on Jan. 2-How do I reconcile that?
    • CommentAuthorcbmtax
    • CommentTimeJan 9th 2008
     
    Dec. - Debit all of you wage and payroll tax accounts as you normally would. Credit an account called Accrued Payroll instead of cash. This will show the expense to the year used but not affect cash in 2007. All of your taxes would need to be based on 2008 tax rates.

    Jan - Debit the Accrued Payroll account and credit cash. This will clear the accrual account and record the checks to the proper period.

    I hope this helps.

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