26. BULLETIN 985, U. S. DEPARTMENT OF AGRICULTURE. 
G. ACCRUED LIABILITIES. 
PAY-ROLL ACCOUNT (G1). 
Debit: 
1. With all amounts paid to employees 
for services, including advances 
made in cash. 
Credit: 
1. With the amount of unpaid labor as 
' shown by the balance sheet at the 
time of opening the books. 
2. With the amount of the pay roll, as 
shown by the time sheet at the 
close of the period. (Debit Sala- 
ries and labor). 
It is necessary to include all employees on the pay roll, regardless of the depart- 
ment in which employed. 
The following journal entry will serve to illustrate the 
operation of this account and would be made at the end of each period. Example: 
The entire pay roll is $400 and $20 had been advanced during the period: 
JOURNAL ENTRIES. 
Debit. 
$135.00 Factory labor. 
265.00 Office labor. 
Credit. 
(For periodical pay roll.) 
380.00 Pay roll. 
Inasmuch as the $20 has been charged to the Pay-roll account at the time the ad- 
vance was made, it is evident that the credit of $3880 to the bank account will close 
the Pay-roll account. 
Occasionally an employee may desire an advance on his labor account in which 
case Pay-roll account should be debited for the amount advanced. 
It is not con- 
sidered advisable to carry ledger accounts with employees because of cash advances, 
but very careful note should be made of such advances to prevent duplicating the 
payment. 
Should an employee purchase merchandise, such sales should be charged to his 
personal account. 
At the end of the period, or whenever the pay roll is made up, 
a check should be drawn in favor of the employee for the full amount of his wages. 
The employee should then settle his account in the regular way. By following this 
procedure the records will reflect clearly the transactions involved. 
The following journal entry will illustrate this procedure: 
Debit. 
$8.50 John Jones. 
Merchandise sales. ._. 
Credit. 
Siem a at Re Ml oh teat So eo a $8. 50 
(For sale of merchandise to John Jones, employee.) 
John Jones would then receive his entire wages and would settle for his account by 
the following transactions: 
Debit. Credit. - 
$8.50 Cash. 
Fohmi SOMES eee ys Ce ek LO Re ee Ee $8. 50 
(For payment of John Jones account. ) 
ACCRUED TAXES AND RENT (G2). 
Debit: Credit: 
1. At the beginning of the fiscal period 
with the credit balance. (Credit 
Taxes, account O04, and rent, ac- 
count 03.) 
1. With the amount of accrued rent and 
taxes as-shown by the balance 
sheet at the time of opening the 
books. 
2. With the amount of accrued rent and 
taxes at the end of the fiscal peri- 
od. (Debit corresponding ex- 
pense account.) 
This account should be entered only State and local taxes and rents. Income taxes 
must not be charged here, but should be charged to surplus. 
