To view the purposes they believe they have legitimate interest for, or to object to this data processing use the vendor list link below. Chapters 5-8 Current Assets. When it comes to payroll accounting, you typically use expense, liability, and asset accounts. Most big companies further divide the salaries payable account as per demography or department to get a clearer picture of their salary payable account. Wage Expense vs. Salary Expense The difference between wages and salaries is often poorly understood. Step by Step Guidance with Example, What is the Price Discrimination? This is because these are the expenses that are relevant to the current month, and therefore, they should be recorded as such in the financial statements. The employees will be paid on January 5. Hence, the only differential when it comes to Salaries and Wages (Expensed) and Salaries and Wages Payable, is the credit entry. The following shows the number of hours worked by each employee for the month of January: Question: Determine the wage expense and salary expense for the month of January. Like assets, liabilities fall into two categories: Current, and fixed. Currently, employers pay a 6.2% Social Security tax and a 1.45% Medicare tax (7.65% in total). (8 Points You Should Assess), 10 Best Business Consultancy and Advisory Services In Cambodia, 10 Best Financial Consulting Firms In Cambodia, How to Account for Uncollectible Accounts? We and our partners use cookies to Store and/or access information on a device. (8 Points You Should Assess), 10 Best Business Consultancy and Advisory Services In Cambodia, 10 Best Financial Consulting Firms In Cambodia, How to Account for Uncollectible Accounts? In other words, it means that the organization needs to pay its salaries and wages to its employees, and they have already rendered services (or work) against this amount. The correct answer to this question is BOTH. How to start a business: A practical 22-step guide to success, How to write a business plan in 10 steps + free template, What is cash flow?

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