Hi Simranjot, they will eventually be paid to the respective recipients. For example, withholdings for Federal Income Tax, Social Security and Medicare will be paid to the federal government when they are due. These videos discuss that: ua-cam.com/video/XyMmMeHYDSY/v-deo.html ua-cam.com/video/rdM0P-BEAPY/v-deo.html
As shown in the video, when the pay period ends (and before the employees are actually paid), the accountant records a journal entry that INCREASES Salary Expense (debit) and INCREASES Salary Payable (credit). So at this point in time, the "accumulated expense" (as you call it) has already been recorded and the accounting records show that the salary is owed to the employees. So to answer your question, if the company can't pay the employees 2 weeks later on payday, NO journal entry is recorded because expense has already been recorded and the salary payable has been recorded. However, the employees might want to update their resumes and start looking for a job at a better company :-) I hope that helps!
@@XanRussell Since we have not paid 300 to worker.how can we show only 200 payable to worker from Jan 29 To Feb 2. jan 29=100 jan 30=100 jan 31=100--------Wages expenses 300 Dr. feb1=100. To Accrued wages. 300Cr. feb2=100______Wages expenses 500 Dr. Tota=500 To wages payable 500 Cr. now,that expenses has become 300+500=800 but actual is 500.So,we credit wages expenses.And writeoff Accrued expenses by debiting 300 to transfer it to accounts payable(wages payable).When total expenses is accumulated,when you get invoice for that you transfer accrued to payable or receivable. Accrued wages. 300 Dr. To wages expenses. 300 Dr. Wages payable 500 Dr. To cash. 500 Cr.
@@XanRussell upto Feb 2 it should be 500 right??? and since it is paid daily it should be called wages not salary. So, Jan 31. wages expenses (E+) 300 Dr. To accrued wages(L+) 300 Cr. Feb 2 wages expenses (E+) 500 Dr. To wages payable (L+) 500 Dr. Wages Accrued Expenses ---------------------------------- ------------------------------ jan31 300 | 300. 300. | 300 Jan31 Feb2 500 | | --------------------------- ------------------------------ Dr.800|Cr.300. Dr.300| Cr.300 here required wages expenses is 500 and accrued wages is 0 to transfer it to account payable. So, to adjust that we debited Accrued wages by 300 and credited wages expenses by 300. Wages payable. Cash ------------------------ ----------------- 500 | 500 Feb 2. | 500 Feb 2 Feb2 Accrued wages (L-) 300 To wages expenses(E-) 300 Feb2 Wages Payable (L-) 500 To cash (A-) 500
I spent an hour yesterday on a homework problem regarding reversing entries. This clarified EVERYTHING for me. Thanks so much!
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I've been trying to understand all this week and this video help me to understand it less than 4 minute
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I've been trying to understand all this for 2 weeks and this video helped me understand it in less than 5 mins
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😂 right! Me all week
Great explanation! I feel like my textbook is trash. Thanks for the help!
Great to hear! In case it helps at all, I have a playlist that includes all of my lectures and homework demos for my "Intro to Accounting" course.
I really like this teacher , he help me to understand. thank you very much
You are welcome!
Still confused I wish I could email a copy of of payroll only 3 ppl for one month
Thank you so much for easy explanation.
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You are great teacher.
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a blessing from the accounting god
Thanks so much!
Thank you! this really helped with my class
You're very welcome, Erica! 😊
what will happen to taxes and employees benefits here?
Hi Simranjot, they will eventually be paid to the respective recipients. For example, withholdings for Federal Income Tax, Social Security and Medicare will be paid to the federal government when they are due. These videos discuss that: ua-cam.com/video/XyMmMeHYDSY/v-deo.html
ua-cam.com/video/rdM0P-BEAPY/v-deo.html
What if the company had some issue and couldn't pay the salary for the previous 2 weeks. How to show the accumulated expense?
As shown in the video, when the pay period ends (and before the employees are actually paid), the accountant records a journal entry that INCREASES Salary Expense (debit) and INCREASES Salary Payable (credit). So at this point in time, the "accumulated expense" (as you call it) has already been recorded and the accounting records show that the salary is owed to the employees. So to answer your question, if the company can't pay the employees 2 weeks later on payday, NO journal entry is recorded because expense has already been recorded and the salary payable has been recorded. However, the employees might want to update their resumes and start looking for a job at a better company :-) I hope that helps!
Thank you!!! Great explanation.
You are welcome, Katie!
Thank you. Well explained
Thanks, Venus!
So if I credit cash will my cash account be off when I pay them?
How can you credit cash if you haven't paid them?
@@havachat9927 why I’m learning
@@XanRussell Since we have not paid 300 to worker.how can we show only 200 payable to worker from Jan 29 To Feb 2.
jan 29=100
jan 30=100
jan 31=100--------Wages expenses 300 Dr.
feb1=100. To Accrued wages. 300Cr.
feb2=100______Wages expenses 500 Dr.
Tota=500 To wages payable 500 Cr.
now,that expenses has become 300+500=800 but actual is 500.So,we credit wages expenses.And writeoff Accrued expenses by debiting 300 to transfer it to accounts payable(wages payable).When total expenses is accumulated,when you get invoice for that you transfer accrued to payable or receivable.
Accrued wages. 300 Dr.
To wages expenses. 300 Dr.
Wages payable 500 Dr.
To cash. 500 Cr.
@@XanRussell upto Feb 2 it should be 500 right???
and since it is paid daily it should be called wages not salary.
So,
Jan 31. wages expenses (E+) 300 Dr.
To accrued wages(L+) 300 Cr.
Feb 2 wages expenses (E+) 500 Dr.
To wages payable (L+) 500 Dr.
Wages Accrued Expenses
---------------------------------- ------------------------------
jan31 300 | 300. 300. | 300 Jan31
Feb2 500 | |
--------------------------- ------------------------------
Dr.800|Cr.300. Dr.300| Cr.300
here required wages expenses is 500 and accrued wages is 0 to transfer it to account payable. So, to adjust that we debited Accrued wages by 300 and credited wages expenses by 300.
Wages payable. Cash
------------------------ -----------------
500 | 500 Feb 2. | 500 Feb 2
Feb2 Accrued wages (L-) 300
To wages expenses(E-) 300
Feb2 Wages Payable (L-) 500
To cash (A-) 500
great video, thank you!
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Thank you so much🫶🏽
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Good
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thank you
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you rock!
Thanks so much, Ziad!