Control Accounts

sarva

I need to distinguish between salaries control account and salaries expence account. If anybody recomend a book I can gothrough it.
Thanks
Sarva

sheelagh

Payroll

In my opinion Frank Wood's Bookkeeping and Accounts is a good bookkeeping manual.

In the meantime, I will outline the concept

The payroll expenses account is used to record the costs
- ie, gross wages and employers NI. The balance of this account will be an accumulation of wages costs in the accounting period.The expenses account is in the profit and loss section of the chart of accounts, in the direct costs and/or overheads section.
The payroll liabilities account is used to record the liabilities to HMRC and to the employees. The balance of this account will change, according to how much is owed to HMRC and to employees, at any point in time. Payroll liabilities accounts are in the balance sheet section of the chart of accounts, in the Other Creditors section.


A standard payroll journal will be
DR Gross wages
DR Employers NI
CR Net Wages
CR PAYE control ( employers NI, employees NI and Tax deducted)

When wages are paid to employees, and PAYE paid to HMRC, the double entry will be
CR Bank
DR Net wages / PAYE control
Thus the balance sheet accounts are reduced to nil.

I hope this helps

sarva

Thank You for your reply Sheelagh.I got the basic from you.
Sarva