Payroll take 2

Jon Lapham lapham at extracta.com.br
Wed Jul 23 20:07:37 CDT 2003


Dale Alspach wrote:
> To me this is not a double entry problem but an accrual vs cash accounting
> question. 

Dale, what's not a double-entry problem?  Payroll in general, or are you 
referring to Aldous Everard's message?

> Businesses are generally required to use accrual so the liability
> appears when the employee has earnings even though an employer may only
> remit monthly or quarterly to the government.
> 
> This brings up one other question for the payroll section. Many employers
> actually do not pay on the last day of a pay period but several days later.
> The system outlined will be technically incorrect during period the between the
> end of the pay period and the actual distribution of checks to employees.
> This could occur over an accounting period boundary with a resulting
> problem with,  for example, end of year reports.

Did you see my first proposal?  The big difference was that it included 
a liability account for employee salary (as well as the taxes).  Would 
that kind of setup work for what you are talking about?

You could incur the liability on the last day of the month, even if you 
only write the paycheck a few days later.

-- 
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  Jon Lapham  <lapham at extracta.com.br>          Rio de Janeiro, Brasil
  Work: Extracta Moléculas Naturais SA     http://www.extracta.com.br/
  Web: http://www.jandr.org/
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