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Accounting & Bookkeeping & Small Business Forum
Accounting, Bookkeeping, Marketing, and Small Business Resource
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damo
Joined: 23 Mar 2006
Posts: 2
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| Posted: Thu Mar 23, 2006 5:51 am Post subject: when do i recognise this expense? |
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| If for example I have wages owing but not payed of $6000 at June 30, 2005, do I record it in the financial statements for the period ending June 30, 05, or do I recognise it when I pay the wages in the next period? |
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Richard Noot
Joined: 20 Aug 2005
Posts: 912
Location: Minnesota
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| Posted: Thu Mar 23, 2006 3:32 pm Post subject: |
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| Depends on whether you are on the cash or accrual basis |
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Monica
Joined: 17 Aug 2005
Posts: 188
Location: Texas
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| Posted: Wed Apr 12, 2006 5:32 am Post subject: Recognizing this expense |
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Hello damo,
Most likely if you are accounting for a $6000 payroll entry, you are using an accrual basis, so the entry would go on the books as wages payable. Refresh your memory by going back over a lesson or two with your UAC course, if you have that. If you don't check your accounting textbooks, or look at some balance sheet examples. Unless the payroll is automatically debited to the employee's bank account, it would be wages payable.
If you are on a cash basis, you would record the entry when you pay it.
Hope this helps!
Monica |
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Holly Sheldon
Joined: 11 May 2006
Posts: 3
Location: NY state
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| Posted: Thu May 11, 2006 7:54 am Post subject: |
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| I agree with Monica... you have to be consistant on your reporting. Determine whether you are doing your records as cash or accural - then be consistant with that. :D |
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