WAGES help!

System

Hi,
Im on Foundation level diploma and trying to revise for the dec exam (AAAAH!!!) im stuck on wages!
for instance were all the double entry goes, especially the wages and salary control account! im just stuck as hell and panic has started! lol!

thanks peeps :shock:

System

Re:WAGES help!

Dr - gross wages
Dr - employers national insurance

Cr - net wages
Cr - PAYE
Cr - employers and employees national insurance.

Think of it in real life - the total cost to the company is the gross wage + Ers NIC, and as they are an expense they must be a debit.

Everything else is just what is left - think about what is on your payslip every month.

Hope this helps.

Claudia

System

Re:WAGES help!

Sorry to throw a spanner in the works, but I'd have to disagree ... I'm just revising this bit at the moment and according to my study/work books it's actually the other way around in the Wages and Salary Control Account:

DR Net Pay
DR PAYE
DR Employee's NIC
DR Employer's NIC

CR Gross Pay
CR Employer's NIC

Still not sure that I really understand it though!!

Rous

System

Re:WAGES help!

I do the wages at work and I do the journal exactly as stated by Claudia.

System

Re:WAGES help!

OH BUM - now I'm really confused!!!

OK, just read my notes again to try and make some sense of this and I think it's all my fault - I guess I read the question wrong (sorry!).

My notes say: 'Wages EXPENSE Account (not Control Account) shows the total cost of employing the workforce'(Gross Pay + Employer's NIC) and this is a DR in the Wages Expense Account.

Phew, glad I muddled through that one, as Claudia's explanation made such perfect sense I couldn't understand why my notes didn't tally with it!!

I'm off to hang my head in shame now!

Rous

System

Re:WAGES help!

Don't worry - at least you understand it now, so will be fine in the exam if it comes up

Claudia