Question

Discuss

1: Your understanding of the accounting side of payroll

2: Your understanding of the tax side of payroll

3: What's the two major general journal related to payroll

4: sharing payroll working experience here.

Answer 1

As per policy, only one question is allowed to answer at a time, so answering Q 1 :

Ans. 1)

Every business who is employing more than ten employees has to maintain the payroll accounting records. These records include the payroll journal entries towards the recording of payroll expenses in the financial books. These journal entries are to be posted to the business general ledger. The company has to book expenses relating to the payroll account which includes gross wages and salaries and other earnings with all the deductions and payroll taxes. The various types of payroll accounting journal entries are of three types: 1) Recording Journal Entries, 2) Recording accrued wages and 3)Actual wages and due payments.

1. Recording Journal Entries : These are the primary journal entries for payroll accounting, which includes recording the gross wages of your employees earnings and all the withholdings including the employment taxes that business owe to the government.
2. Recording accrued wages : Under the payroll accounting, there exists certain entries which are recorded at the end of each accounting period. These journal entries includes all such dues which has to be booked in the present accounting period but yet to be paid in the next accounting period. These entries are used to be reversed in the period of actual payment.
3. Actual wages and due payments: When ever there is a manual payments through checks, the adjusting journal entries have to be passed through the payroll accounting . These entries mainly take place on employee terminations or retirements.

Under the Payroll accounting, there exists certain liabilities and expenses which are to be recorded under the general ledger, after the journal entries, which are:

1. Gross Salaries and wages account
2. FICA tax payables
3. Federal and State income tax payable withholdings
4. Salaries and wages Payables (in coming period)
5. Other retirement contributions deductions and withholdings
6. Federal and State unemployment tax payable
7. FICA tax payables (the employer share)
8. Cash account

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