{"id":2446,"date":"2021-09-28T13:41:12","date_gmt":"2021-09-28T13:41:12","guid":{"rendered":"https:\/\/ibrowsbyannie.com\/?p=2446"},"modified":"2023-04-04T13:01:32","modified_gmt":"2023-04-04T13:01:32","slug":"step-7-reconcile-salaries-payable","status":"publish","type":"post","link":"https:\/\/ibrowsbyannie.com\/?p=2446","title":{"rendered":"Step 7 Reconcile salaries payable"},"content":{"rendered":"<div id=\"toc\" style=\"background: #f9f9f9;border: 1px solid #aaa;margin-bottom: 1em;padding: 1em;width: 350px\">\n<p class=\"toctitle\" style=\"font-weight: 700;text-align: center\">Content<\/p>\n<ul class=\"toc_list\">\n<li><a href=\"#toc-0\">Employees and related accounts<\/a><\/li>\n<li><a href=\"#toc-1\">Examples of Salary Payable<\/a><\/li>\n<li><a href=\"#toc-2\">Financial Statements:<\/a><\/li>\n<li><a href=\"#toc-3\">What type of account are wages and salaries payable?<\/a><\/li>\n<li><a href=\"#toc-4\">Balance Sheet: Accounts, Examples, and Equation<\/a><\/li>\n<\/ul>\n<\/div>\n<p><img decoding=\"async\" class='wp-post-image' style='margin-left:auto;margin-right:auto' src=\"https:\/\/business-accounting.net\/wp-content\/uploads\/2021\/07\/image-UHOkEAXW1mIg2Doh.png\" width=\"251px\" alt=\"what is salaries payable in accounting\" \/><\/p>\n<p>When a company calculates its salaries expenses, it must record them in the books. This  transaction increases expenses through salaries expense. Usually, this expense is the same amount companies use to record salaries payable. Consequently, it may confuse some into thinking salaries payable is an expense. However, the subsequent transactions qualify salaries payable as a liability.<\/p>\n<ul>\n<li>Assuming the conclusion is not to pay to staff, the unpaid amount should be reversed from the payable and then recognized as other income or offset with the current period salary expenses.<\/li>\n<li>Wages payable is the line item that identifies how much in wages are owed to workers but have not yet been paid.<\/li>\n<li>Most big companies further divide the salaries payable account as per demography or department to get a clearer picture of their salary payable account.<\/li>\n<li>In short, the difference between salary expense and salary payable is that the salary expense is the total expense for the period while the salary payable is only the amount of remuneration that is due.<\/li>\n<\/ul>\n<p>Therefore, Kite Co. must remove the balance from the liability account. Below is the basic journal entry that shall be passed into the books of account for accruing the salary payments. It is a line item in the balance sheet, while salary expense is featured in the income statement. Alternatively, the corresponding transaction would have been a credit to the bank account in order to reflect the payment that was made in lieu of salaries and wages.<\/p>\n<h2 id=\"toc-0\">Employees and related accounts<\/h2>\n<p>Of the $200,000, 25% relate to wages for factory workers while the remaining relate to wages for workers at the head office. Wage expense refers to the cost incurred by an organization to compensate employees and contractors for work performed over a specific time period. The classified balance sheet will show which asset subsections?<\/p>\n<p>Given this information, the company has wages payable of $560 ($400 + $160) as of December 31. Payroll TaxPayroll taxes are statutory deductions made by the employer from an employee\u2019s regular salary and wages, and usually, such withholdings mostly have both employer and employee equal contributions. These taxes are collected by tax authorities from respective employers and paid for human welfare schemes, infrastructure development. All the Taxes account types like Social security, State Income tax, Health Insurance, etc., payables accounts are created to record the withheld amounts and reconcile the same with relevant tax authorities. Further, when the salary is paid, it can be paid via various methods, including Bank, Cash, Online modes, etc., and the same must be entered in the journal entry.<\/p>\n<h2 id=\"toc-1\">Examples of Salary Payable<\/h2>\n<p>Accounting is done against the vouchers created at the time the expenses are incurred. It follows the matching principle and recognizes the salary expenses during the period when they occurred. In most cases, the amount of salaries payable is substantially lower than the amount of salaries expense. Salaries expense A\/CXXSalary payable A\/CXXCash A\/CXXIn this step, the salaries payable are debited, and so the value reduces on the Balance Sheet. Thesalariesexpense is debit here as there may be some amount of salaries that have accrued but haven\u2019t been yet reflected in the salaries payable.<\/p>\n<div style='text-align:center'><\/div>\n<p>Salaries and wages define the money paid to employees for their work. Usually, salaries refer to a fixed monthly amount that employees receive based on their contracts. On the other hand, wages are hourly rates multiplied by the hours worked by an employee.<\/p>\n<h2 id=\"toc-2\">Financial Statements:<\/h2>\n<p>It is located in the current liability section of the balance sheet. To increase this account you must credit it and to decrease it you must debit it. Although the salaries expense is recorded on the income statement under the cost of goods sold or other operating expenses, it also affects <a href=\"https:\/\/business-accounting.net\/the-differences-in-wages-payable-wages-expense\/\">what is salaries payable in accounting<\/a> the company\u2019s current liabilities and assets. This is because the salaries expense is a liability that must be settled within a year and usually translates to a reduction in assets. Based on our discussion, we have seen that the salaries expense is a debit and not a  credit.<\/p>\n<div>\n<div>\n<h3>Is salaries payable on the sheet or income statement?<\/h3>\n<\/div>\n<div>\n<div>\n<p>The salaries and wages expense is presented on the income statement, usually within the operating expenditure section.<\/p>\n<\/div><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Content Employees and related accounts Examples of Salary Payable Financial Statements: What type of account are wages and salaries payable? Balance Sheet: Accounts, Examples, and Equation When a company calculates its salaries expenses, it must record them in the books. This transaction increases expenses through salaries expense. Usually, this expense is the same amount companies [&hellip;]<\/p>\n","protected":false},"author":565,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[45],"tags":[],"class_list":["post-2446","post","type-post","status-publish","format-standard","hentry","category-bookkeeping"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Step 7 Reconcile salaries payable - Annie Studio<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ibrowsbyannie.com\/?p=2446\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Step 7 Reconcile salaries payable - Annie Studio\" \/>\n<meta property=\"og:description\" content=\"Content Employees and related accounts Examples of Salary Payable Financial Statements: What type of account are wages and salaries payable? 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