What type of account is the wages control account?

I can't figure out which of the five types of account it is - asset, liability, income, expense or capital. I have a feeling the answer is going to be 'none', which would really rustle my jimmies tbh.

Comments

  • Cheesypeesy
    Cheesypeesy MAAT Posts: 102
    edited April 2018
    It would be a liability account since what's credited there is what the business owes to its employees, HMRC, pension schemes etc. Payroll expenses such as Gross Pay and NI would be posted to the debit side since these are expenses to the business.

    When it comes time to pay the wages, the account will be debited and the bank credited. This should reconcile to what was due in that period.

    It's similar to the Purchase Ledger Control Account in terms of postings, just a few more expense accounts involved.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
  • Urthona26
    Urthona26 Registered Posts: 4
    That doesn't make sense to me. If it's a liability account, entries on the debit side are assets or reductions in liability, not expense.
  • Cheesypeesy
    Cheesypeesy MAAT Posts: 102
    Sorry, I meant the debits are posted to their respective expense accounts. For example:

    DR Gross Pay
    CR Wages Control Account

    DR Employer's NI
    CR Wages Control Account.

    I shouldn't be answering questions so late at night!
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
  • Urthona26
    Urthona26 Registered Posts: 4
    But what about when wages are then transferred to accounts according to function. For example, wages to production being debited to the production account, wages for production overheads being debited to the production overheads account?
  • CSan89
    CSan89 MAAT Posts: 207
    You just spread the cost between the accounts

    Dr Production wages ac 600
    Dr Admin wages ac 400
    Cr Wages Control ac 1000
    AAT Level 2&3 - 2016
    AAT Level 4 - 2017
    Personal Tax, Business Tax and External Auditing

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    Certificate Level - Jan 2019
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