Why this is mistaken
Record wages in the period employees perform the work. If payment occurs later, record a payable for the unpaid amount. Employee deductions reduce the payment to employees, not gross wage expense. Record the amounts owed to other recipients separately.
When the employer pays the recorded obligation, debit the payable and credit cash. Do not record the same expense again.
Where to watch
When this mistake may appear
- A payroll spanning year-end is paid in January.
Check your work
Your work may contain this mistake if:
- All gross wages are recorded in January.