mployees performed services in 20Y8, but the wages were not paid until 20Y9. During which year would the wages expense be reported on the income statement under (a) the cash basis? (b) the accrual basis?

mployees performed services in 20Y8, but the wages were not paid until 20Y9. During which year would the wages expense be reported on the income statement under (a) the cash basis? (b) the accrual basis?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 6DQ

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Concept explainers

Payroll Entries

Payroll is a comprehensive record of employees that are paid by the company. Payroll classifies employees into various categories according to their function and pays scale (basic wage, allowance, income tax, other taxes, employee loans, etc.). Payroll processes form the bedrock of every organization as it contains sensitive information on the ‘wage and paycheck’ portion of the company’s strength—its employees. The organization needs to keep a track of the employees currently on the payroll, the net payout for the company, the record of transactions related to the employees including deductions and payroll taxes to identify the liability and its effect on the balance sheet (and other financial statements). Payroll records also include qualitative factors such as the conduct of the employee.

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Employees performed services in 20Y8, but the wages were not paid until 20Y9. During which year would the wages expense be reported on the income statement under (a) the cash basis? (b) the accrual basis?

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