I was ask how does this effect the income statement. "I paid the employer match of 401k from the 401k withheld instead of the accrued profit sharing account. " I thought when we made the adjustment that would bring the income statement down by the amount of the match but I was told it didn't effect the income statement. WHO IS RIGHT??



Thanks
Darlene
:confused:

Whoever told you it didn't effect the income statement was correct.

From my understanding, 401K withheld is a tax liability withheld on behalf of the employees to the government.

And as you know, liabilities never touch the income statement.