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njp419 · Apr 24, 2010, 05:15 PM

In a payroll situation, where the payroll falls on a day other than the end of month day, how do we accrue and provision for reverse entries

pready · Apr 26, 2010, 08:04 AM

At the end of the accounting period you need to compute the salaries and wages expense for the time between the last payroll date and the ned of the accounting period. An example is your pay period ends on a Friday and the next week on Wednesday your accounting period ends, you will need to compute 3 days of acrued salaries.

Your journal entry will be:
Debit Salaries or Wages Expense for the amount
Credit Salaries or Wages Payable for the amount.

At the end of the pay period when you pay for 5 day of wages your journal entry will be:
Debit Salaries or Wages Payable for 3 days of wages
Debit Salaries or Wages Expense for 2 days of wages
Credit Cash for 5 days of wages.

morgaine300 · Apr 28, 2010, 11:10 PM

Do you mean reversing entries? If so, at the beginning of the next period, you literally reverse your adjusting entry: Dr the payable and cr the expense. Then when you do the next payroll, you record it as usual as though that adjusting entry never happened the payable isn't there.