1/24/20161ACCT 1329PAYROLL ACCOUNTINGCHAPTER 6Analyzing and JournalizingPayroll1Learning Objective #1Record payrolls in payroll registers andpost to employees’ earnings records2Accounting for Payroll TransactionsPayroll requires entering data (in order) in thefollowing places:◦Payroll Register◦Employee Earnings Records◦General JournalJournalize gross wages and withholdingsJournalize payroll taxes and workers’compensationJournalize period-end accruals◦Post to General Ledger3Payroll RegisterThepayroll registeris thefirstsource andstep in recording payrollRow for each employee and has a column for:◦Gross wages◦Taxes withheld and each deductions◦Net payCheck numbers by:4Regular + OT Wages=Net Pay + FICA + FIT + Each DeductionEmployees’ Earnings RecordsSecondsource and step is to transfer info toemployees’ earnings recordsUsed to track cumulative totals (wages & taxes)Row of data for each pay period and used for:◦Tracks when an employee reaches the wage limitfor FUTA, SUTA and OASDI taxes◦Provides data to issue W-2s◦Prepare payroll analyses (internal and external)◦Settle employee grievances over regular/OT pay5Recording Gross Payroll &WithholdingsThird stepand source is to enter informationinto theaccounting system◦Gross payroll is recorded as an expense◦Each withholding tax is credited to a liability◦All other payroll deductions are liabilities aswell and are credited6DebitCreditSalary / wage expenseXXWithholding tax #1 (liability)XXWithholding tax #2 (liability)XXCash or Salary / wages payableXX
