ACNT 1329_Chapter 6 - 1/24/2016 Learning Objective #1 ACCT...

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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 RegisterEmployee Earnings RecordsGeneral JournalJournalize gross wages and withholdingsJournalize payroll taxes and workers’compensationJournalize period-end accrualsPost to General Ledger3Payroll RegisterThepayroll registeris thefirstsource andstep in recording payrollRow for each employee and has a column for:Gross wagesTaxes withheld and each deductionsNet 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 taxesProvides data to issue W-2sPrepare payroll analyses (internal and external)Settle employee grievances over regular/OT pay5Recording Gross Payroll &WithholdingsThird stepand source is to enter informationinto theaccounting systemGross payroll is recorded as an expenseEach withholding tax is credited to a liabilityAll other payroll deductions are liabilities aswell and are credited6DebitCreditSalary / wage expenseXXWithholding tax #1 (liability)XXWithholding tax #2 (liability)XXCash or Salary / wages payableXX
1/24/20162Learning Objective #2Understand the various deductions –both voluntary and involuntary (taxes andgarnishments) – that are taken out ofemployees’ gross pay7Recording Gross Payroll &WithholdingsDeduction from employee’s paycheck by employeris recorded in aliabilityaccountEmployer owes the amount withheld to pay:IRS, state or local government treasuryGroup life insurance premiumsHealth insurance premiumsPurchase of government savings bondsUnion dues

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Term
Summer
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Tags
Payroll Accounting, Taxation in the United States, fica taxes payable, Garnishment

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