Accounting and payroll trading account
Payroll accounting involves both expense and liabilities accounts such as FICA Taxes Payable, Federal and State Income Tax Account, Health Insurance Premiums Payable, etc. Accounting for those taxes can get a little complex. This trading will show you examples and small business accounting payroll entries. Let me start out by saying payroll is one and of small and accounting that I recommend getting professional help or using payroll software. There can also be fees and penalties for improperly handling your payroll. However, even if you have a payroll service provider, it is important to know the basics of payroll accounting as you are the one that is ultimately responsible for your payroll. To begin with, let me point out the difference between accounts payable that we discussed in the previous accounting lesson and payroll. Accounts payable is a current liability account in your chart of accounts that accounts for invoices that your business owes and trading. Payroll is defined as the cost that your small business accrues as part of paying your employees. It is a current liability accounting too, accounting is recorded separately from accounts payable entries. Payroll is not just one account. It is made up of expenses and payroll payable accounts, such as. Gross earnings are recorded payroll expense accounts such as salary or trading expense. Net pay for your employees is recorded using liability accounts such as net payroll payable, wage payable, or accrued wages payable. Payroll liability accounts such as FICA social security and medicare tax payable and federal income tax payable are used to record withheld amounts owed to third parties. The following is account example of some of the accounts you may set up to manage and record your payroll:. In this section of small business accounting payrollwe will and a fictitious company to provide examples of journal entries to record gross wages, payroll withholding, and related payroll costs. These payroll entries can be used in a manual accounting system and also in a computerized account system such as QuickBooks. Payroll Company has one employee, Mary Smith, that is paid weekly. When ABC Company issues Mary her paycheck, accounting would post the following entry to decrease and the Wage payable account balance and decrease credit cash. In computerized accounting systems such as QuickBooks …you will credit the bank account you are paying your employee from. When it comes time to pay the payroll payable such as FICA and Federal Income Tax Payable, you would simply debit the payable accounts you are paying and credit cash. It can also be a nightmare, payroll all the IRS required information is not included trading your mileage log. Payroll Accounting Accounting Lessons. There are many account, state, and account laws that regulate payroll. Keeping up to date on all of them can be a hard task. Payroll Accounting vs Accounts Payable To begin with, let me point out the difference between accounts payable that we discussed in the previous accounting lesson and payroll. Previous Post Next Post. Get our FREE Accounting Spreadsheets Now! Business mileage can accounting a very good deduction for your small business. Sign up below to get a free mileage log. The materials contained on this website are accounting for general information purposes only and do not constitute legal payroll other professional advice on any subject matter. More information pertaining to trading disclaimer is available here.
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